US
- The January ferrous scrap trade finalized a good portion of activity late last week with residual deals continuing to settle throughout this week. In the Southeast, some sellers in Texas and the Carolinas did not finalize placements until Tuesday.
- Price levels ended as expected with most grades from the Midwest to the East rising by $90-100/gt compared to December settled prices.
- Some secondary grades such as machine shop turnings and P&S 5ft did not fare as well and moved up by $60-75/gt only in certain regions, based on starting price points when the month began. Towards the end of the trade, cut grades that started out at $90/gt above last month, traded at lowered values. However, prime grades moved at up $100/gt then made further gains of $10-30/gt in late-trade deals.
- Some mills near the East Coast raised prices by $75/gt on cuts and filled requirements without difficulty. Prices in Arkansas rose by $100-120/gt while other Southern regions increased prices by $100/gt on prime grades and $60-70/gt on secondary grades.
- In Chicago, #1 busheling sold for $470-500/gt, while #1 HMS ranged between $405-430/gt. P&S 5ft concluded trade at $450-490/gt. The last deals for Shredded were under $460/gt, though it settled higher.
- Ohio Valley region, one of the strongest markets, mostly traded prime grades at up $100-120/gt with some deals increasing by as much as $130/gt above December levels.
- Meanwhile some cut grades such as shredded sold at increases of $90/gt in early trade after which, prices were lowered by-the-day from Chicago to Ohio Valley locations.
- The lower trend was consistent in the Southeast where buyers who purchased at up $60-65/gt updated any further deals by $10/gt against recently settled prices. The trend is pointing to the potential for a softer market in the February ferrous scrap trading week. Expectations range from sideways to down $10-20/gt across most grades. Shredded is noted in excess supply by market participants.
- The Philadelphia market gained some traction this month following small buy programs and lesser increases during December. Prime grades increased by $120/gt with the index for shredded increasing by $105/gt delivered Philadelphia mill and P&S 5ft increasing by $113/gt from December settled prices.
- In Texas, the monthly Davis Index increased by $103/gt delivered for #1busheling, #1 HMS climbed by $62/gt delivered, P&S 5ft firmed up by $68/gt delivered, and shredded increased by $67/gt delivered.
- The Davis Indexes in Alabama rose by $104/gt delivered for #1 busheling, by $59/gt delivered for #1 HMS, and by $59/gt delivered for P&S 5ft and shredded. The P&S 3ft index in the region rose by $57/gt delivered.
- The market is losing some of its enthusiasm as the shadow of uncertainty looms over the pricing outlook for the rest of the first quarter. Mills are not expected to make drastic downward moves on high finished steel prices or HRC with 10-11 week lead times but may begin tempering them from the current levels.
Canada
- The Canadian December ferrous scrap trading settled on Thursday with surges of C$110/nt on prime grades and C$56-133/nt on cut grades.
- Market participants considered the January ferrous market in Canada to be one of the strongest months as the domestic mill demand soared.
- There is a sense of uncertainty in the market with the renewed COVID-19 related lockdowns in Ontario and Quebec.
- In Toronto, P&S 5ft transacted within the price range of C$85-100/nt increases following the price rises in the US’ Chicago, and Midwest regions. Depending on the mill, the approximate price gap between P&S 5ft and Shredded widened by C$5/nt from December to about C$15/nt.
- The monthly Davis Index for prime grades in Toronto surged with #1 bundles up by C$109/nt delivered mill and rising by C$110/nt delivered for #1 busheling.
- The index for #1 HMS rose by C$133/nt delivered, Machine shop turnings increased by C$90/nt delivered mill, and shredded climbed by C$108/nt delivered. The monthly Davis Index for P&S 5ft in Toronto increased by C$107/nt delivered.
- Prices in Montreal increased for all grades with #1 busheling rising by $110/nt delivered mill, and #1 HMS ticking up by C$91/nt delivered. Machine shop turnings rose by C$55/nt, P&S 5ft increased by C$90/nt, and shredder feed climbed by C$56/nt all on a delivered mill basis.
- Overall, the export markets have been strong through the month, however, Turkish imports have decelerated after buyers became inactive earlier this week. The domestic market is also expected to be sluggish in February with prices moving sideways to down. ($1=C$1.26)
Spain
- Davis Index’s monthly Spanish consumer ferrous scrap indices increased by €82/mt ($99/mt) following the conclusion of recent deals in mid-January.
- Spanish mills were obliged to pay significantly higher for their domestic scrap purchases over the past month as prices tracked developments in the UK and EU shortsea market.
- Robust Turkish purchasing activity has driven the benchmark HMS 1&2 (80:20) ferrous scrap import index parabolically higher to a recent peak of $482.50/mt, cfr Turkey, during this period.
- More muted hikes materialized in the Spanish import market as buyers pushed back based on meagre domestic finished steel prices and margins.
- Moreover, one Spanish scrap buyer commented that they were obliged to pay higher rates for local material to prevent volumes from heading towards export markets. (€1 = $ 1.21)