Summer shutdowns at Stelco and Gerdau in tandem with a strong export market caused a steep decline in prime scrap prices in Toronto at the end of August trade. Cut grades in the region dropped marginally and shredded and turnings were sideways.
In Toronto, #1 bundles and #1 busheling decreased by C$31/nt ($23.07/nt) with the monthly Davis Index for #1 bundles falling to C$297/nt delivered consumer and #1 busheling decreasing to C$295/nt delivered.
The monthly Davis Indexes in Toronto for HMS 1&2 (80:20) declined by C$5/nt to C$213/nt delivered consumer, while turnings and shredded were flat at C$164/nt delivered and C$275/nt delivered, respectively. The index for P&S 5ft declined by C$5/nt to C$238/nt delivered consumer.
The prices for #1 busheling plunged by C$58/nt in Montreal with the monthly Davis Index for the grade falling to C$302/nt delivered consumer.
The Davis Index in Montreal for HMS 1&2 (80:20) increased by C$15/nt to C$210/nt delivered consumer, while the P&S 5ft index rose by C$6/nt to C$240/nt. The index for turnings jumped by C$25/nt to C155$/nt delivered though shredder feed declined by C$7/nt to C$165/nt delivered consumer.
Stelco, a major steel mill in the Toronto region, has taken its furnaces offline for realignment and is rumored to reopen only in October, thus significantly cleaving demand for P&S 5ft. Gerdau has also shut down operations for the summer.
According to a market participant, there is a major overhang of busheling scrap, and the surplus has caused prices to plummet this month. Cut grades only fell by C$5/nt because export markets have been robust of late since the grade is in high demand and low supply.
Several market participants believe the market has bottomed out and will rise later this month and into September.