Ferrous scrap suppliers quickly accepted unchanged bids from US electric arc furnace steel mills this week after a doubling of US steel tariffs to 50pc buoyed the market.

Market participants expected prices to remain steady or move slightly down before this week's monthly trade because of waning finished steel demand and order books. US hot-rolled coil (HRC) prices fell to the lowest level in nearly four months leading into the trade.

But US president Donald Trump's 50pc steel tariffs, which took effect 4 June, bolstered the outlook for US steel prices and likely helped stabilize scrap. Mills could have had trouble raising steel prices if they paid less for scrap, market participants said.

The entry of two national mill buying groups at unchanged levels across all their regions quashed any other attempts by other steelmakers to try to lower prices this month.

Most scrap suppliers had braced for slight declines this month and some dealers said they would have accepted lower bids from steel mills this month because of their inventory levels and concern for steel demand through the summer.

As a result, the unchanged price trends were quickly agreed upon and the trade moved swiftly. Argus assessed unchanged prices across all US regions for June scrap deliveries compared to the prior month.

National average prices for #1 busheling remained $420/gross ton (gt) delivered, the lowest price since January. The average shredded price stood at $369/gt, a six-month low.

Scrap prices this spring nearly erased gains made during the winter's tight supply environment, making any further drop in prices unappealing to scrap dealers.

Scrap supply and demand remained in relative balance this month. Scrap supply surged this spring after the harsh winter thawed in the northern US. Those strong supply flows of obsolete grades of scrap have begun to wane in recent weeks, scrap dealers said. Lower inbound flows through May aligned with weak steel demand, order books and pricing.

The US steel tariffs could cause slowdowns at Mexican and Canadian steel mills if the tariffs remain in place. Mexican and Canadian mills scaled back scrap buying programs this month.

A prolonged absence of Canadian and Mexican mills from the market could redirect more scrap toward the US domestic market. The absence of Mexican mills from the Texas market earlier this year resulted in an overhang of scrap, which weighed on US domestic prices in March and April.