NEW YORK — Minimal interest from Mexico and other export markets, coupled with little change in demand from Texas steel mills, has left scrap dealers disappointed as prices failed to gain the traction they had hoped for.
Most market participants in the Texas region said increases in scrap prices for March were anywhere between $15 and $30 higher per gross ton, depending on scrap grade, mill location and the February price level. For the most part, obsolete scrap grades settled March 8 at $20 above February’s level, with prime gaining an additional $5, according to several sources.
Many dealers suggested the increases were insufficient given much stronger trends recorded in the Midwest, and they questioned how effective this month’s increase would be in improving the flow of obsolete scrap to dealer yards.
Sources said a weak domestic market in Mexico, which traded sideways for March, meant that many Mexican mills refused to follow the Texas market up $20 per ton.
“The Texas market was then left to the demand from its own mills, which has been steady but not entirely strong for the past few months,” one source said. “So dealers didn’t get the big increases they were seeing in other regions. Domestic mills were able to control the price jump.”
However, a buyer for one mill said the increases were meaningful.
“I do not consider paying upwards of $15 to $30 per gross ton this month controlling the jump. Plate and structural scrap seemed to be the grade that was hard to find this month, but we were able to meet the needs of the melt shop,” he said.
A third source called demand from mills a mixed bag since December.
“I’ve gotten very mixed feedback. It seems like demand from mill to mill is distinctively different,” he said. “Some mills are having a hard time getting what they need, and others don’t need or want much. Mexico needs to buy, but the Mexican market was sideways, so it made it hard for them to buy scrap from us.”
A fourth source said Mexican demand dipped last month and has yet to recover.
“Mexico-bound scrap volume was much reduced in February. Heavy melt, (plate and structural) and shredded sold for around $350, $360 and $370, respectively,” he said. “There’s a lot of scrap available in South Texas. We did not buy any for our Mexico customers, though.”
Little interest from Turkey and a near standstill in containerized scrap exports to India have also contributed to the lack of competition for ferrous scrap in areas that can ship through export yards, according to a few sources.
“It started off like a ball of fire and then frizzled out. A lot of dealers thought they’d be able to control the mills because they thought mills hadn’t bought much in the past months,” a fifth source said. “But mills felt they don’t need to pay that much to run this month out and wait for April.”