01 May 2014 Last updated at 07:27:11 GMT

WASHINGTON (Scrap Monster): The shipment of scrap to steel mills for May requirement has started on a weak note. The shipments on to-be-determined (TBD) basis indicate that the oversupply of shredded ferrous scrap may limit any upside. On the other hand, tight availability of cut grades and prime scrap may raise their prices. The negotiations are expected to settle early next week.

The steel mills are reported to have sufficient stocks of shredded scraps. Scrap dealers expect no major order for shredded scrap. The abundance of shredded may result in lesser demand from steel mills. The prices are expected to remain flat to sideways. In mid-April the scrap flows increased drastically following improved weather, which saw steel mills stocking in huge quantities. But sharp fall in shredded prices was prevented by improved steel mill demand in April over the previous month. Industry sources indicate that the shredded scrap market is likely to become firmer in the forthcoming months.

The shredded scrap transactions at a US Midwest mill concluded at $395-405/lt. The No.1 busheling transactions too stood at similar levels. The increased imports from Canada have augmented the busheling supply in the market during recent months.

The supply of cut grade and prime scrap remains limited. The prices of these scraps are expected to go higher slightly on tighter availability. According to scrap dealers, there has been an increased pressure from steel mills in the country towards quick supply of primes.

Author: Paul Ploumis