Posted on 13 May 2025
US May scrap trading, which settled last week, was hit by weak mill demand and competitive steel imports, falling below market expectations for some grades.
Compared to April values, busheling prices declined by $30/gross ton in most regions and by $40/gt in Texas. Cut grades saw an approximately $40/gt drop, while shredded scrap followed with an average decrease of $40/gt, and as much as $50/gt in Detroit. The sharper correction in Detroit was attributed to previously overvalued shredded feedstock in the area.
Oversupply remains the main issue. While supply recorded a significant increase, US steel mills have reduced their scrap buying programmes, with some reports indicating cuts as steep as 50%.
Meanwhile, based on the latest hot rolled coil transaction prices and prevailing scrap values, mill margins are seen to have contracted. This margin compression, combined with a cloudy outlook; weakened export values throughout April; and low-priced HRC imports are among the key factors contributing to the trend in May.
For the West Coast, US-origin HMS 1&2 80:20 offers fell to below $285-288/t cfr Taiwan, while bids stand at around $280/t cfr Taiwan. Meanwhile, Taiwan domestic mill Feng Hsin has kept its scrap prices stable as of Monday. However, market participants think it can be cut by TWD 200/t ($6) throughout the current week.
On the East Coast, scrap prices in Türkiye continued to rise last week. Multiple deals from the US were concluded at $337-340/t cfr Türkiye levels.
Although scrap suppliers are eyeing higher values, the likelihood of Turkish mills accepting higher scrap prices will hinge entirely on developments in finished steel sales and imported billet offers.
Amid current market conditions, US market participants believe that accelerating exports is essential to ease domestic oversupply, which indicates there could be an increased number of US offers to Türkiye, notes Kallanish.
Besides Türkiye, Mexican mills are reportedly returning to the US market for scrap purchases. Market participants hope this could help absorb a portion of the estimated 100,000 tonnes of scrap oversupply currently affecting the Texas region.
Source:Kallanish
