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US scrap prices heading down in Oct

US scrap market players are expecting lower scrap prices next month, they tell Steel Business Briefing.

“It appears the market will be down by $20-25/long ton due to the lack of new export business,” said one source in the Mid-Atlantic states.

RMDAS US scrap price index up for August

An index compiled by Management Science Associates (MSA) shows significant price increases in August for two of the three grades it tracks.

On average, MSA’s RMDAS (Raw Material Data Aggregation Service) shows prices changing from July(on a delivered-mill basis) by as little as a $3/long ton decrease, to as much as a $28/l.t increase.

Falling scrap prices likely dragging down market

Declining scrap prices are expected to drag down US longs prices with them, Steel Business Briefing understands.

A source at one domestic beams producer predicted yesterday that prices for delivery of that product next month would fall along with the decline in scrap by $20-40/short ton.

Source: Steel Business Briefing

August US scrap surcharge benchmark down

August US scrap surcharge benchmark down $45/l.ton

A key scrap price that determines surcharges for August deliveries of many steel products in the US market fell by $45 – from $350 to $305 per long ton, Steel Business Briefing learns.

As SBB has previously reported, scrap market players had been expecting a drop in scrap prices due to especially weak export demand.

Source: Business Briefing

US scrap market puzzles over price

A higher than expected jump in US scrap prices has some in the scrap market feeling skittish about volatile prices, Steel Business Briefing notes.

“The numbers have gotten out of control,” said one Midwestern US scrap buyer, while predicting the market would go up again in January. “There will be no way that mills can pass along that kind of a steel increase to their customers…therefore it will create a margin squeeze on the mills, which isn’t good for anyone.”

Courtesy: Steel Business Briefing

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

US demand too weak to prop up steel prices against falling scrap

With US shredded scrap prices dropping by up to  $30/long ton this month, there is a very good chance that US rebar prices will fall right along with them.

Given the ongoing weak demand in the US rebar market, it is quite likely that this time, domestic mills may opt to  lower rebar prices in step with the decreases in scrap.

Meanwhile, Turkish mills are still pretty hungry for business and they are seeing falling scrap costs as well. However, if US prices do come down another notch as expected, Mexican rebar imports, along with imports from other sources, will most likely come down by at least as much in order to stay competitive with US material. Source: SteelOrbis  – – For the latest in steel news & trends subscribe to SteelOrbis News at

US rebar market awaits pricing after scrap market tumble

With the worldwide financial crisis showing no signs of abating and the US headed into what many analysts predict will be a long recession, there is not a great deal of hope that the global steel markets will see a speedy recovery. However, the outcome of the historic US presidential election underway Tuesday will certainly have at least some effect on the direction of the US economy and, directly or indirectly, on the steel markets. As a major rebar distributor in the US told SteelOrbis this week, “The presidential election will definitely have an impact on the market, but how much of an impact is unclear.”

With US shredded scrap prices falling below Nucor’s $162/nt scrap surcharge baseline, the domestic rebar leader has a tricky decision to make about how they want to handle their next pricing move.

Nucor’s raw material surcharge (RMS) for long products, first instituted several years ago to reflect the then-rising scrap costs, has a Program Baseline of $162/nt, which was the price of shredded scrap when the surcharge was first put into place.

The RMS, which is usually adjusted on a monthly basis when scrap prices are rising or adjusted more frequently when scrap prices are dropping, is based on the difference between current scrap prices and the program baseline. Although scrap prices have risen and fallen numerous times in recent years, they have remained well above the $162/nt ($179/mt or $8.10 cwt.) baseline – until now. In the last month, shredded scrap has lost almost half of its value, tumbling down to the current level of $125/long ton.

An announcement from Nucor is expected in the coming days, and since there is no precedent for this situation, it is not clear yet what the industry leader will do. Rather than applying a negative surcharge, however, (based on the current formula, the RMS would be minus $37/nt) it is more likely that Nucor will eliminate the RMS, at least for the time being, and lower its base prices instead. Scrap surcharges, once put in place to help producers recover their high raw material costs, are now doing the companies more harm than good as scrap prices have plummeted. If the company does indeed get rid of the RMS, for the first time in a long time the base price will be the same as the transaction price.

Currently, domestic rebar mills are offering at a range of $37.50 cwt. to $38.00 cwt. ($827 /mt to $838 /mt or $750 /nt to $760 /nt) ex-mill. Based on the additional $75/long ton that scrap prices have fallen this month, Nucor and other domestic rebar producers are expected to lower transaction prices (whether it be by lowering base prices or applying a negative RMS) by a total of $75/nt ($83 /mt or $3.75 cwt.), bringing most offers down to around $34.00 cwt. ($750 /mt or $680 /nt) ex-mill.

On the import side, offers are still substantially lower-priced than the offers from domestic mills. Import offers from Turkey have dropped by about $2.00 cwt. in the last week to a range of $27.00 cwt. to $28.00 cwt. ($595 /mt to $617 /mt or $540 /nt to $560 /nt) duty-paid, FOB loaded truck, in US Gulf ports. Although there are some indications that scrap prices in Turkey are finally bottoming out, the pricing trend is still down due to the weak demand. Import offers from Mexico are slightly above the Turkish price, with most offers ranging from $29.00 cwt. to $30.00 cwt. ($639 /mt to $661 /mt or $580 /nt to $600 /nt), delivered to Houston.

Courtesy: SteelOrbis

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