The June ferrous scrap trade kicked off mid-day Thursday after a few Detroit area mills bid at $50/gt price increases for secondary grades, including shredded and up $60/gt for prime grades over last month’s settlements.
Several East Coast exporters bumped up local dockside pricing for #1 HMS by $30/gt to $420-430/gt from $390-400/gt earlier in the week, prior to trade commencement on Thursday. The decision was seemingly made to compete with steel mills ahead of domestic pricing that was forecast to rise in line with recently announced levels.
Based on the early trend, #1 busheling may trade at $620-630/gt on average in the Detroit region and could reach up to $570-650/gt in surrounding markets based on starting price levels from last month. This also places the prime grades’ value closer to basic pig iron (BPI) that currently stands at around $665/mt cfr Nola, which translates to $676/gt. However, BPI offer levels are back up this week ranging from $670-700/mt cfr Nola on sustained steel price increases, iron ore as well as scrap.
As late as this morning some market participants expected trading to be delayed to Monday given the holiday, but others highlighted the high likelihood of June trading beginning this afternoon as, despite logistics, most participants report having finished May deliveries.
In Texas, rain and logistics are supporting the expectation of the same pricing increase as the one in the Midwest despite initial conversations of sufficient scrap supplies in the region and some rebar mills buying slightly fewer volumes that could have influenced the region to only gain $30/gt on May settled prices. Davis Index will publish updated indexes between June 4 and early next week as regional markets settle. Mexican mills are also seeking import ferrous supplies for June delivery which will support the region.
Hot-rolled coil (HRC), cold-rolled coil (CRC), and galvanized coil continue their upward trend this week with HRC trading at about $1,763/mt ($1,600/nt) fob mill and CRC trending at about $1,973/mt ($1,790/nt) fob mill, maintaining a $210/mt spread.
Base prices for galvanized coil are at $2,072/mt ($1,880/nt) fob mill, about $100/mt over CRC. Finished steel prices have risen by 58-60pc since early January on strong demand and higher raw material prices.
Finished steel’s domestic spot market volumes continue to remain limited with long lead times. There is little relief from imports due to scarce volume offers at attractive pricing due to tariffs or AD/CVD cases.
Rebar, plate, profiles, and other finished steel products have also continued increasing prices since the upswing began in August 2020.