US sheet mills in the Midwest have been quietly scrambling to secure No1 busheling more than a week ahead of the start of the May trade.
Flat-rolled mills have received orders for hundreds of thousands of tons of new steel and recognize there is not enough prime scrap – which includes No1 busheling and No1 bundles – to cover their order books.
“Everyone knows there is no busheling out there. We have like zero,” a supplier into the Detroit market said. “The mills do have orders, and what are they going to melt?”
A second seller into the Detroit market said that No1 busheling was selling at $300 per gross ton on Monday April 20, at $308 per ton on Friday April 24 and could be at $315 per ton by May 1.
Fastmarkets’ price assessment for steel scrap No1 busheling in Detroit settled at $260 per ton in April, down by $30 from March; a number of side deals reportedly have been concluded at higher prices after the monthly trade.
A third seller into Detroit said that he sold one truckload into Detroit but has no intention of selling what his industrial accounts generate.
“With side deals being carved upwards of $300 a ton, I am setting material on the ground and then will watch to see what happens,” the third seller into Detroit said, noting that he will probably unload his material in June.
A seller into the Chicago market said he normally brings 9,000 tons of busheling to market each month and had only 140 tons to offer in April.
“Price doesn’t make a lot of difference when [the supply] just isn’t there. We just don’t have any. All the plants around here are shut down until at least May 1,” the seller into Chicago said. “Mills dropped the price knowing they need scrap, and steel mills took advantage of scrap guys. This time we are returning the favor. They ran out a week ago and they are crying for the scrap.”
Sources indicated that mills having been digging deep into their inventories and were afraid the level would be too low.
And sources in Canada and Mexico also said that US mills had been calling and looking for material. A Mexico source said that his company won’t have as much to offer because industrial flows are off by 30%.