US shredded steel scrap availability tightened and prices inched up as the June mill procurement period came to a close, market sources said Friday.
Mills reentering the market late in the week to acquire additional shredded material found lower-priced dealer offers seen earlier in the week were no longer available.
Shredded scrap transactions earlier in the week settled at levels $20/lt below May pricing in the Midwest, Northeast and Southeast, but dealers began to balk at those prices late Thursday and into Friday.
Based on offers and transactions in the market, the Platts daily assessment for shredded scrap inched up $2.50 day on day to $370-375/lt delivered Midwest mill. The assessment midpoint is still down $12.50/lt compared to early May.
A majority of mills concluded their initial shredded buying programs down $20/lt, while cut grades were down $10/lt and prime scrap moved sideways.
"However, the market has bottomed at this level and most mills are seeking additional scrap, which will cost more," one Ohio Valley dealer said.
Market contacts attributed the strengthening of shredded prices to tighter-than-expected demand and mills seeking to pick up more tonnage in anticipation of a delayed July-procurement period caused by US Independence Day celebrations.
"Mills are calculating their needs for the July 4th holiday and buying for a five-week month," one broker said.
The discrepancy in price drops between shredded and cut grades led to plate and structural scrap transacting at higher prices than shred in most regions. In Detroit, early-week shredded deals were finalized at $365/lt, while plate and structural settled at $370/lt.
Prime scrap remained sideways in most regions. No. 1 busheling prices settled around $400-405/lt in the Midwest. Some mills with ample prime supply in the Southeast were able to lower prices $5, according to market sources.
Most mills were aggressive in purchasing primes. Market sources reported an upcoming unplanned outage at Nucor's direct reduced iron facility in Louisiana as contributing to a spike in demand for prime grades. Nucor has not responded to inquiries regarding the potential maintenance outage.
Cut grades of scrap were down $5-10/lt in the northeast and $10-15/lt in the Southeast. Turnings were described as the weakest grade, falling $20-25/lt in most regions.
