March domestic ferrous scrap trade in the US kicked off on Wednesday in Detroit as several mills in the area announced price increases of $10/gt on prime grades. The mills kept prices for shredded and other secondary materials unchanged.
By Wednesday afternoon, many Detroit mills reported filling their requirements at the prices announced earlier in the day. Some sellers also confirmed those numbers, but other dealers waited until Thursday hoping for better pricing.
Some sellers reported on Wednesday they would try to sell at or above $20/gt but by Thursday the momentum swayed the suppliers to accept buyer offers, to flat March pricing for shredded and other obsolete grades. Primes largely sold at price increases of $10/gt over February. However, several prime grades remained at last month’s levels, especially in Philadelphia where large volumes of primes were being offered.
Several shredders who have paid higher prices over the past few weeks to secure shredder feed material expressed concern that flat shredded prices for March would hurt their margins.
Chicago, Ohio Valley, Cleveland, Pittsburgh, Philadelphia, and Cincinnati wrapped up trading on Thursday. Central and Southeast US waited for cues from the Midwest and began settling by Thursday. A few remaining deals, especially, in the South and Southeast were concluded by Friday morning.
In Canada, Dofasco entered the market on Friday morning at up C$15/nt ($12.51/gt) for prime grades and up C$3/nt ($2.50/gt) for cut grades.
Mills reported they could meet tonnage requirements for the most part. A large Detroit area steel producer had a reduced buy due to an upcoming shutdown scheduled in April while a few other Midwest steel producers bought reduced scrap tons due to operational issues or were back in the market with reduced needs after not buying tons in February.
Exporters that usually rely on containerized export, moved tonnage into the domestic market due to limited container availability.
Davis Index was informed that a considerable amount of material was offered into the market above original projections – many sensing that April will be a weaker market. Market participants also reported earlier that material was tight even though there are some overhanging tons in the market, which also contributed to declining sentiment.
Exports dampened the market sentiment during trading week as export yards lowered collection prices on Tuesday and could do so again on Monday by about $15/gt, to compensate for the slowdown in Turkish activity. Covid-19 was also cited as a factor driving market sentiment down due to its impact on business outlook and the global economy.
The national trend was consistent as reflected in the Davis Indexes from the Midwest to South. The Davis Indexes in Detroit increased by $12/gt on #1busheling to $295/gt, HMS 1&2 (80:20) decreased by $2/gt to $235/gt, turnings trended unchanged at $141/gt, P&S 5ft declined by $1/gt to $248/gt, and shredded ticked up by $2/gt to $269/gt, all in delivered terms.
In Houston the Davis Indexes increased by $10/gt on #1busheling to $305/mt. Other Houston indexes remained range bound with HMS 1&2 (80:20) increasing by $1/gt to $249/gt, turnings rising by $5/gt to $185/gt, P&S 5ft going up by $2/gt to $273/gt, and shredded remaining flat at $288/gt, all in delivered terms.
In Montreal, #1 busheling increased by C$10/nt to bring the monthly Davis Index to C$310/nt, while HMS 1&2 (80:20) rose by C$2/nt to C$230/nt and increased for turnings by C$4/nt to C$184/nt. The Davis Index for P&S 5ft increased by C$3/nt to C$253/nt, while the shredder feed rose by C$6/nt to C$196/nt.
($1 = C$1.34)