US: Stainless steel processor buying prices up

US domestic ferrous scrap trading began slowly on May 5, when SDI and NorthStar mills in Detroit announced May pricing at increases of $30-40/gt on primes and $20-30/gt on shredded and cut grades compared to April settled prices. However, some sellers in the region hope for higher price increases due to supply tightness. May buying activity is moving as predicted so far, with prime demand leading. Sellers with material can push prices above market level from mills that need tons. Some busheling offers in Detroit at $300/gt delivered—which translates to about $35-40/gt above April pricing—were turned down on Wednesday. Market participants report busheling being sold in Ohio, Alabama, Philadelphia, and New York at $310-315/gt delivered. A high-priced deal was concluded in Detroit at $340/gt for busheling and some shred deals were between $245-270/gt. Several market participants are also reporting ongoing negotiations in Chicago and Cleveland that could see some prices settle in higher ranges than the $20-30/gt offers on shredded and cuts at present. Of note is that the mills in these regions were also more aggressive in dropping prices in April. Scrap dealers report sales volumes will likely be around 50pc for May compared to a typical month reflecting the 50pc US crude steel capacity. Inbound feedstock flows into scrap yards declined further than expected sales, by around 30-50pc of typical flow, depending on the region. Exports off the East Coast have slowed as Turkish buying prices and activity declined compared to mid-April. Turkey scrap import prices from the US gained $14/mt on HMS 1&2 (80:20) from $243/mt cfr Turkey in early April to around $257/mt cfr Turkey in mid-April. The latest US origin scrap deal in late April dropped prices by $19/mt as HMS 1&2 (80:20) traded at $238/mt cfr Turkey. East Coast dock prices are projected to fall by $10-15/gt this week compared to last week on soft export demand from Turkey and other Asian destinations. Some mills on the East Coast bought early this week at up $20/gt on cuts at $25/gt on shredded scrap compared to April settled prices. In Dallas, mills increased prices by $30/gt across all scrap grades compared to April settled prices. Scrap traded in Arkansas, Alabama, Georgia, and Louisiana at plus $20/gt on cuts and shredded scrap and plus $30/gt on primes compared to April settled prices. Sales in North and South Carolina followed the Midwest trend with increases of $30/gt on shredded and cuts and $40/gt on busheling compared to April prices. Big River Steel is taking an outage during May. To the extent that any material purchased from scrap yards by Big River, offer prices are expected to trend sideways on extremely limited demand. Gerdau’s mills in Jackson and Monroe could purchase limited quantities due to idling schedules. Shredder feedstock, sold to shredders for scrap processing, increased throughout the Midwest and Southeast with prices increasing by $20-30/gt against April prices. On the northern West Coast, prices of shredder feedstock increased at some sites by $10/gt this week in preparation for the expected increase of $10-15/gt on scrap purchases by regional mills.