MarketAnalysis
Bumpystart to the New Year RAWMATERIALS
Harsh winter storms lift US scrap prices despite holiday-related slow activity Price firming was seen with in the US domestic scrap market in early November with East Coast and Midwest prices increasing between $25-$30/lt in the previous two weeks. East Coast ranges crept up to $360-$370/lt for HMS I, $390-$400/lt for shredded and $415-$425/lt for busheling, and scrap dealers said the uptick was largely tied to increased demand within the US domestic and export markets, compounded with dwindling supply. A similar situation was seen in the Midwest, where prices increased $30/lt since late October. HMS I was transacting in the approximate range of $380-$390/lt, shredded firmed to $390-$400/lt and busheling leveled out at approximately $420-$430/lt. Midwest dealers said there would continue to be a limited flow of shredded and HMS scrap through the first part of 2014, placing the forecast at neutral to firm. As such, sources told SteelOrbis that steel mills would likely not find much resistance to raw material-backed price increases in the near term, especially in the long product sector. Scrap prices throughout the US Midwest held steady through the rest of November, as most mills replenished their inventories with buys made early in the month. Prices in Chicago remained unchanged for HMS I in the approximate range of $380-$390/lt, $390-$400/lt for shredded and $420$430/lt for busheling. Scrap dealers said prices in the Ohio Valley also trended sideways and remained at $370/lt for HMS I, $380/lt for shredded and $425/lt for busheling. Buys for December were not expected to be substantial, especially in light of the Christmas holiday. Meanwhile, mill-delivered prices on the East Coast were also unchanged since early November. As with the Midwest, mills were not expected to buy heavy in December—
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inventory levels were already slightly up, and they were keeping a close watch on year-end levels. Additionally, dealers described scrap flow as being decent, all of which placed the East coast scrap price forecast for December at neutral as well. By early December, Ohio valley prices for shredded and busheling scrap firmed by approximately $15-$20/lt, as a pummeling, slow-moving snowstorm in the central portion of the country all but halted scrap collection efforts. Dealer sources said that obsolete grades and shredded scrap became more scarce, although busheling seemed to be readily available. Pittsburgh/Cleveland prices for HMS I continued to hold at $380$390/lt, although shredded and busheling scrap firmed to the approximate ranges of $415-$425/lt and $430-$440/lt, respectively. P&S grades were also available in the range of $410-$420/lt. East Coast prices, however, did not waver. Prices for HMS I continued to hold, as did the ranges for shredded and busheling. Prices within the South were also strong, at $400$410/lt for shredded and $425-$435/lt for busheling. Dealer sources said they did not expect a lot of activity during the month due to the year-end holiday season, but consumption levels were described as “healthy”. Although current prices were expected to hold steady throughout the month, mills who jumped late with their purchases may have found themselves paying slightly more. Near the end of December, scrap dealers in the Southern US expected that prices for HMS I, shredded and busheling would tick upward for January buys, and the market could be up anywhere from $10-$20/lt across the board, with prices for shredded expected to settle at $410-$420/lt and busheling in the approximate range of $435$445/lt. Mills who made mid-month buys paid up slightly from levels seen during the first part of the month, and with order books improving and steel prices holding firm, Volume 7; Issue 1
dealer sources expected a flurry of purchases once the year-end holidays concluded. Meanwhile, East Coast prices in the Philadelphia region for HMS I were steady at $340-$350/lt, while shredded and busheling ranges remained at $390-$400/lt and $410-$415/lt, respectively, but that market was also expected to be up $15-$20/lt come January. Intake in the North East was terrible, according to dealer sources, who point out that snowstorm after snowstorm placed a huge damper on scrap collection. A similar trend is expected for the Ohio valley. Although prices for HMS I, shredded and busheling scrap have held in the approximate ranges of $380-$390/lt, $415-$425/lt and $430-$440/lt, respectively, January prices were forecasted to settle up between $10$15/lt as well. As of the beginning of the New Year, activity within the East Coast and Ohio Valley scrap markets quieted down after many chose to extend their holiday vacations. But once everyone returned to work, the January trend was expected to settle sometime during the first week of the year. SteelOrbis sources confirmed that 45,000 lt of shredded scrap was sold on the East Coast at approximately $415/lt just before the New Year, reflecting an approximate $15/lt increase from buys in December. is would likely set a tone for January buys, which meant the mid-December forecast continued to hold that East Coast prices within the Philadelphia region, previously at $340-$350/lt for HMS I, $390-$400/lt for shredded and $410$415/lt for busheling, would increase by approximately $15-$20/lt for January. Meanwhile, activity within the Ohio Valley was also light due to the year-end holiday period. December prices for HMS I, shredded and busheling scrap, at $380-$390/lt, $415-$425/lt and $430-$440/lt, respectively, were still projected to settle up between $10-$15/lt in January. Dealer sources, however, pointed out that the Polar Vortex
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