Scrap Prices for September Looking Sideways to Down $20

Earlier this month the consensus of opinion among our ferrous scrap sources was that we had seen the bottom for scrap prices and, more than likely, prices would rise as we entered September negotiations. However, that was then, this is now. As we enter the negotiation period for September ferrous scrap buys by the domestic mills, we know the mills are going to try to push buying prices lower. The market opinion at the moment is for scrap prices to trade sideways to down $20. We could see larger drops depending on the region and the product.

SMU learned from one of our sources, “The Chinese billet prices are dropping every day, down $34mt from last week.  70,000mts booked this morning at $296/mt CFR.  Scrap will have to adjust and it is – latest sale to Turkey of HMS is down $5/mt and most expect large drops coming including me.  This is affecting the Sept US domestic outlook as most now believe Sept will be sideways at best.  Previously consensus was [for] stronger prices in Sept.”