The January scrap trade was a bit of a mixed bag, with mills pushing hard to take prime scrap prices down, and sellers throughout the US putting up quite a bit of resistance to the trend. And while some regions ultimately settled at down $30/gt for busheling, other regions were able to hold prices at sideways from December settled levels.
At this point, there are several factors to keep an eye on heading into February.
For example, SteelOrbis sources in Istanbul have noted that rebar demand in Turkey is still stagnant, which provides little support for higher export prices.
Looking to the domestic market, the months-long uptrend for US HRC prices appears to be coming to an end, which will also influence scrap prices next month. Flat rolled sources have indicated they’re seeing cracks in sheet pricing, and many believe we’re either at or just about to pass the peak of this uptrend’s bell curve.
It’s largely believed that HRC prices are likely to endure a slow downward drift in the upcoming weeks.
On the other hand, scrap market sources in multiple regions are saying that winter weather and snowstorms are impacting deliveries, which has the potential to impact pricing during next month’s buy cycle. Depending on how the rest of the month goes, this may or may not influence scrap availability, and price trends, going into February.
“Mills will be owed a lot of material at month end,” said a source in the Midwest, adding he believes that next month’s prices are likely to hold sideways. “I think some of them will cancel orders but inflows are so low that the volumes can’t be made up.”
Other sources also believe that today’s snapshot of the market points to sideways to soft-sideways pricing.
“I think [HRC prices] have peaked and have already started the downward trek,” added a source from the Southeast. “I think demand [for scrap] will stay strong in February which potentially keeps prices sideways, but I don’t see any upside over the next couple of months. I’d call February a soft sideways at this point.”
A Chicago-based source said he believes February will stay relatively flat, as demand and supply in that region appear to be OK right now, although he, along with sources in the Ohio Valley, have said that collection efforts are being slowed by cold weather and snowstorms.
“[Is it] enough to have an effect on pricing? We will have to wait and see,” he said.