US August ferrous scrap trading this week is expected to begin on August 5 and settle by August 7. For the most part, market sentiments for August trading remain unchanged from those in mid-July.
In the Midwest, prime scrap grades could decrease by $20/gt against July settled prices while obsolete scrap grades such as shredded and heavy melting steel are expected to trade soft sideways. Some early obsolete scrap deals in the central region were already reported to Davis Index at a loss of $10/gt at the end of July, against last month’s scrap prices.
Detroit continues to be the weakest market in the Midwest with weakness reportedly lingering in prime grades. A few market participants believe prime grades could decline by $20-30/gt in some Midwest deals compared to July settled prices as industrial output produced some inventory overhang. On a positive note, some mills are gradually increasing their scrap volume needs in early discussions.
Texas and other Southeastern regions could see prices for primes declining by about $10/gt and will continue with a strong sideways expectation on obsolete grades. Scrap inventories are tighter in the Southeast and the East Coast.
Export is expected to buoy some deals along the coastline. Several sellers that transact in the Southeast noted the potential for export competition to allow a possible increase by $5-$10/gt on limited deals on obsolete scrap as Pakistan and Bangladesh buyers return to seek ferrous scrap volumes at a time when Indian buyers are also open to accepting higher priced offers.
In Florida, scrapyard operators are reporting negligible impact on the weekend as the region primarily encountered heavy rains due to an impending hurricane, which was later downgraded to Tropical Storm Isaias. Depending on its severity, the storm could have some minor impact on scrap collection rates, as it hits the Carolinas and the East Coast. However, market participants do not expect any long-term negative effects during the domestic trading week.
Tropical Storm Isaias is hitting the Eastern Seaboard with heavy rain, strong winds, and flooding. The Carolinas are bracing at the ports with varied operating policies but mostly continuing with normal hours of operations. Heavy rain in the Carolinas is expected to taper off by Tuesday. The storm is expected to travel into the East Coast. Depending on atmospheric conditions, some meteorological reports warn of an upgrade to hurricane strength status. A warning of isolated tornadoes is also in place towards the east.
Heavy rains are also expected in Philadelphia, New Jersey, and New York into Wednesday. The warning for Tropical Storm Isaias has been issued in northern Maine, a region seldom affected by such storms.