SMU Scrap Sources See Small Decline for Obsolete Grades in August

The ferrous scrap market is showing small signs of weakness looking ahead to August, report Steel Market Update sources, who say prices on obsolete grades such as shredded and heavy melt are likely to decline anywhere from $5 to $20 per ton next month, while pricing of busheling and bundles will remain unchanged.

Demand for scrap domestically remains firm, but shredders are generating enough material to keep up, said one dealer in the East. Prime scrap plant closures are ending, so flow will return to normal soon. The DRI/HBI plants are running again. Scrap demand from overseas has eased, and prices have dropped as a result. “It’s difficult to judge the reason for this, but I would be surprised if Section 232 didn’t have a hand in it,” he said. Taken together, these factors point to busheling prices moving sideways and HMS and shredded taking a $20 drop, he predicted.