The scrap steel markets continue their sideways trend in the Western US and throughout much of the country. The market has remained unchanged since March leaving many of us trying to determine what we can expect through the summer months. Prices did weaken $15 in the Midwest markets, including the Chicago area, where its being reported mills have struggled to reach 80% capacity with softening new steel demand coupled with and mill outages leaving them with surplus scrap inventories. The main question on the horizon is which trend we can expect in the coming months; a stable market with growing new steel demand or a softer sales market with an ample scrap supply. Historically, the summer months tend to be softer then spring and fall months as we have seen in both 2012 and 2013, however, the prices usually hold firm until July or August. Demand for steel in the US and the scrap supply chains will be the driving forces behind scrap prices through the summer months. Another driving force will be whether the recent price increase on beams and other steel products will hold firm and justify a scrap price increase if scrap tonnage tightens over the next 30-60 days.
Increase in demand for scrap has been reported in India as they have seen some strength in the Rupee. Turkey has been reportedly buying bulk cargo loads out of the Gulf Coast thus avoiding higher transportation costs off of the East Coast. Unfortunately, this holds no impact to Export Markets here on the West Coast as the Export Markets on our side of the US continue to be very weak.
Base metals have continued their mixed trends throughout the last 30 days. We saw some moderate gains on Aluminum in early April which sustained through the last half of the month, but have come back down to almost identical levels from 30 days ago. There was little movement among Copper which saw some small gains and declines, but has also remained relatively unchanged over the past month. Stainless Steel pricing is up as Nickel prices have continued to soar posting gains of about 20% from April 1st.
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