Final Thoughts

We are in a very interesting market as many factors are influencing domestic scrap and steel prices. We discuss currency issues in tonight’s issue as the appreciating dollar means less competitive exports out of the United States but it also makes foreign steel imports more attractive to buyers. We have falling iron ore (which is also impacted by a strengthening dollar) and, as one of our scrap sources explained it in another article in tonight’s issue, scrap appears poised to make a fundamental move lower. Just how low scrap can go is open for debate.

With iron ore prices below $80 per dry metric ton (dmt) for 62% Fe in China, scrap moving down $20 and foreign steel potentially seeing prices fall (we heard recent offers of HRC into Houston at $570 per ton), we expect domestic steel prices will continue to be under pressure. Our Price Momentum Indicator is now set at Lower.