US Ferrous Scrap prices likely to trade in narrow range

Author: Paul Ploumis22 Apr 2015 Last updated at 02:59:14 GMT

SPOKANE (Scrap Monster): The US Ferrous scrap steel prices rebounded during the month of April this year, following increased buying by mills as part of restocking ahead of the upcoming spring season. The shredded scrap prices witnessed a rise of $5 per metric ton in April. The average price of scrap delivered to Midwest mills was just over $260 per long ton.

According to market experts, the slight uptick in prices is a good sign. However, this could not be considered as the beginning of a sustained rally. The prices are expected to trade in a narrow range during the rest of H1 2015 and are likely to improve during the last quarter of the year.

The US steel mill utilization rates had dropped to below 70% during the month of March. Weak domestic steel demand has forced many mills to cut utilization levels. In addition, major players including US Steel, Arcelor Mittal and Evraz had idled operations. The inventory levels of flat steel products are reportedly at higher levels. Slower manufacturing output may extend the time period required for complete utilization of those inventories.

Meantime, the turmoil in Iraq and Yemen may affect Turkish scrap exports during rest of the year. The domestic demand in Turkey too continues to remain weak. Consequently, ferrous scrap exports from the US to that country are likely to fall significantly. Moreover, strong US dollar may dent ferrous scrap exports from the country, as European suppliers are projected to gain more ferrous scrap market share.