Scrap Pricing Floor May Hinge on Turkish Buying

Ferrous scrap negotiations have begun between the U.S. and Canadian steel mills with most mills expecting lower prices. One way we know if the mills believe prices will fall is they will cancel any remaining orders from May that have not yet been completed from their scrap suppliers in the hopes of being able to take advantage of the weakening prices. By the end of last week most, if not all, of the domestic mills had cancelled secondary and industrial grades of scrap. Prime grades are a different story and many believe pricing on bundles and Busheling could move sideways or only slightly lower in June which would increase the spread between shred and the prime grades.

Mike Marley, scrap guru for Metal Prices (and one of our speakers at this year’s SMU Steel Summit Conference on September 3 & 4 in Atlanta) pointed out in his publication on Friday that one eastern shredder sold 45,000 tons of shred down $20 per ton. In his article he stated, “Some are worried that this first sale in a declining market could be the best deal. Prices, in other words, could be off more than $20 per ton by the end of the week.”