An unwavering appetite for scrap from steel mills in the United States is fueling market expectations that prices of all grades will rise again in July monthly trading, although to a lesser extent, the Scrap Trends Outlook posting a positive rating of 68.9.
More than two-thirds of survey respondents said they expected prices to rise, and less than 5% expected a drop. The Outlook’s prediction model suggests a potential 9% increase in scrap prices in July, on average.
Inventories are meager ahead of traditional summer auto production shutdowns and demand for scrap continues to rise, with 43% of respondents indicating stronger demand to drive prices down.
Factories are willing to pay to secure tonnages, after increases of $ 50 to $ 60 per tonne paid last month failed to get enough scrap to market to avoid further price hikes. Participants indicated that junkyards do not hold onto material for the sake of making extra money and that scrap is really rare.
Strong export demand from international steel mills is a continuing exacerbating factor in an already hot US domestic market.
The overall trend consensus rose to 68% from 66% in June, underscoring confidence that the market is expected to rise again in July.
Sellers were the most bullish, at 70.6, amid expectations of increased buying activity; followed by brokers, at 66.7; and buyers, at 66.3.
The market outlook for early fall is still relatively positive, with the three-month trend indicator at 53.9 for September, while the six-month trend indicator turned bearish with a reading of 43. , 3 for December.
Premiums are expected to remain the highest qualities in demand in the near term due to the summer shutdowns of auto production, with 57.47% of respondents predicting that the bushel and beams will perform the best.
“The availability of automotive stampers will be key to how much base material will be available in July,” one respondent said.
“Inventories are low and melting rates are increasing. Plant price increases for all types of new steel are holding up, ”said another respondent.