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Chinese scrap market maintains its slight rising trend

Over the past week, the Chinese scrap market saw a slight rising trend, with a further ascension expected in the coming period against the tight availability of scrap supply. However, the relatively soft performance lately observed in the finished steel market is likely to exert a significant impact on the scrap market

Source: SteelOrbis Shanghai  – For the latest in steel news & trends subscribe to SteelOrbis News at

Has the US Hit it’s Peak?

US flat rolled mills have increased their prices every month so far this year, but now there are talks that demand may be faltering, and there is more hot rolled coil (HRC) availability.

Has the market finally reached its peak?

The flat rolled market has seen a wave of increases since the beginning of this year. Domestic mills have continually upped their prices to keep up with rising raw material costs and strong demand. But now it seems the market may be leveling off. Either that or perhaps a seasonal slowdown is occurring.

All of the major domestic mills made their July price announcements a couple of weeks ago, and to customers
surprise, the increase wasn’t as hefty as some expected. Whereas a couple months ago, increases were in the three-digits, the most recent one was modest comparatively. Two major mills even extended their July pricing through the month of August as well, suggesting that things may finally be beginning to cool off.

There have been a couple explanations for this, but most agree, as galvanized coil demand was losing its momentum, mills shifted their production to HRC, as that product was much stronger. Now, ironically, there is more tonnage available and not as strong of a demand for it. This could just be the usual summer doldrums, but it could also be the flat rolled market finally hitting the peak of its latest price rally.

The above offers are for August production and October deliveries as Chinese steel products for July production will not be available for exports, as they are to remain in the domestic market to be used in the relief efforts for the devastating May earthquake in China, according to government mandate.

Possible shortages of light gauge galvanized

I am hearing that there may be a shortage of light gauge galvanized/Galvalume during the July time frame. I am aware of a Chinese galvanizing line that is experiencing problems that may cause it to not ship approximately 15,000 tons of light gauge galvanized meant for the U.S. market.

I am also hearing ArcelorMittal may be having some issues – especially working through the changes necessary with the sale of Sparrows Point and the supply of material to the Double G coating facility in Jackson, Mississippi.

Source :

At the same time I am hearing from HVAC suppliers that inventories are tight at the moment but there is a concern a combination of hedge buying by end users coupled with continued buying of allocated tons by both the service centers and wholesalers may cause a surge in supply during the month of July. I would appreciate any information that you would like to share regarding your particular situation and what you are seeing and hearing from your customers/suppliers.

Scrap – SDI bought another scrap supplier within the past few days. Nucor has been buying up sources as well.

This is something steel buyers need to be aware of and to watch as it can go two ways

1) control of the sources guarantees the mini-mills ample scrap now and into the future.

2) Control of the sources of steel scrap can artificially keep the price of scrap high – thus hurting the buyers of steel products – and pumping up the bottom line of the mills in control of scrap.

Steel Prices – SDI (June), USS (July), Nucor (July), ArcelorMittal (July), Severstal – especially Sparrows Point (July) and the conversion mills – The Techs, Sharon Coatings, CSN and Wheeling Nisshin should all be coming out with prices either yet this week or, if they want to be nice to me because I’m on vacation, by early next week. Please send me an email or a call when you get the news.

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