The US domestic ferrous scrap trade is underway with trends and pricing levels varying regionally as specific supply/demand factors countered a typical baseline national trend.
Some clarity began to emerge late Thursday in some regions as negotiations and trading progressed.
Numerous outages reduced overall scrap demand, while a sudden recent deterioration in export pricing also pressured domestic ferrous scrap prices lower, though regional variations in mill buying programs and supplier resistance helped limit downside on pricing.
Progressively lower offers from one large US broker to multiple mills over the last week ultimately did not gain widespread traction across the US as mill buyers stepped bids back from these levels to better reflect regionally specific supply/demand fundamentals.
Prime grades and shredded scrap were heard to be generally trading between down $20-30/gt for September deliveries from the previous month depending on the region, while cut grades are heard to be trading at sideways-to-down $20/gt.
Argus has not assessed September ferrous scrap prices in any regions yet this month as trading is still underway.
In the north, Detroit-area mills kicked trading off on Wednesday with three mills bidding prime grades down $30/gt, shred down $20/gt and cut grades and machine shop turnings sideways, while a fourth neighboring mill bucked the trend and bid primes and P&S 5ft down $20/gt and shred and #1 HMS down $30/gt.
The variation in bid levels caused some confusion and resistance among suppliers and delayed trade across the region.
Across the wider Midwest trading was similarly stunted by limited mill programs and atypical regional discrepancies.
In Chicago, multiple suppliers were still in the process of concluding both pricing and volume negotiations with most looking to place tons outside the area reflecting a lack of demand.
Multiple mills in the immediate area had limited programs because of planned maintenance and tepid end-user demand.
This prompted many to peg Chicago trends possibly below levels set in Detroit of down $20/gt on primes, $30/gt on shred and as steep as $20-30/gt on cut grades. Still, trading in the region and the Quad Cities was not finalized by Thursday afternoon with some suppliers pushing back and downward momentum losing some steam.
Trading was further along in Cincinnati-Indianapolis, where bigger programs allowed buyers to cement down trends. In this region, #1 busheling and shred trends were shaping up to be the opposite of Detroit at down $20/gt and $30/gt, respectively. This was the case despite weak prime demand, and even as 5ft P&S and #1 HMS were similarly discussed at $20/gt and $30/gt down, respectively.
In St Louis, there was less progress on the trade as of Thursday. Suppliers reported limited traction on pricing by the day's afternoon primarily citing the weakness of programs, especially in northern markets.
Although demand for tons in St Louis from mills in Arkansas and Tennessee was comparatively better, sources found it difficult to place trends with again regional discrepancies playing out wider than usual.
In the Cleveland/Youngstown and Pittsburgh regions trade was still underway with some mills yet to officially enter the market.
Some trades were heard concluded at down $30/gt on primes, down $20/gt on shred and down $10/gt on cut grades, though trading activity is still underway, and some consumers were heard to be targeting steep declines on cut grades.
Trading activity varied across the south with negotiations in Northeast Arkansas taking shape the quickest with smaller buying programs and ample availability of scrap along the Mississippi river aiding consumers.
Prime grades were heard to be trading at down $20-30/gt for September deliveries from the previous month, while shredded scrap was heard to be trading at down $30/gt and cut grades at down $20/gt.
The region is poised to shape-up as one of the weaker areas throughout the south.
Negotiations in the southeast are still underway though prime grades and shredded scrap are heard to be trading at down $20/gt, while cut grades have been heard to be trading at sideways from the previous month.
