Scrap steel prices are down for July, catching us and many other scrap suppliers off guard. We felt that the market prices for steel grades were gaining momentum and headed into positive direction but mills felt otherwise in July and lowered price offerings by $10-$20 domestically depending on the grade. Prices in the Southeast US fell the hardest due to a scrap oversupply and mill summer maintenance shutdowns. Prices fell this month largely due to weak export buys, smaller than usual domestic scrap buys and an oversupply of available scrap in the market. Prices in Asia are so bad, a sale of scrap was sold to Turkey recently off the West Coast despite the expensive freight costs to get it there. This further indicates how bad scrap prices are on the U.S. west coast and the desperation to find valid homes for surplus scrap tons. Domestic mills are getting more offers for scrap tons than needed to melt and as a result buying the cheap tons first to fill their orders pushing down the market. The current environment is ideal for the Domestic mills as many recent price increases on new steel has stuck meanwhile scrap costs are lower thus fattening their profit margins. August prices are already rumored to be down further.
Non Ferrous Prices:
If you’re still reading, I applaud you for sticking in there and not being overwhelmed by all this depressing news. That being said, I’m about to pile on some more bad news so bear with me. Base metal prices also struggled through June falling across the board due to weak Chinese economic variables and a firm US dollar. You can see for yourself on the chart below (or attached depending on your email client) how much red ink dominates the past 1-6 months. Aluminum, stainless and copper prices have continued their weakening trend throughout this year.
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