Obsolete grades of ferrous scrap held sideways in most transactions in the Southeast market Thursday, despite aggressive mill attempts to drive prices down.
Dealers had resisted lower bids throughout the week on their obsolete material and most reported success. Prime scrap fell $10-$20/lt in the region, as many had expected.
"Despite early rumblings of an even softer market, the inventory tightness of the overall metals supply chain -- from scrap processors to mills to steel consumers -- will keep pricing rangebound in the near term," one Southeast supplier said.
Mills in the Midwest and Northeast finalized their August scrap purchases earlier this week, keeping obsoletes sideways and moving primes down $10/lt. The Southern market took longer to develop, as mills had pressured prices.
"I think the South is going to be largely sideways on cuts and shred," another supplier said. "The mills with small buys will be down because they can be, everyone else will be reluctantly sideways."
The river market in the South was being impacted by the arrival of numerous imported bulk cargoes. One supplier said mills were still bidding at down $10/lt on cut grades and shredded material late Thursday.
"It seems overaggressive and will likely impact flows for August," the supplier said. "Looks like they are leveraging some import vessels against domestic tons. Demand is a little softer and scrap, particularly shred, appears to be in a slight oversupply position."
Trading was ongoing late Thursday, and there were mill bids heard as low as down $30/lt for prime material in the Southeast.
Another supplier received bids from a mill to buy cuts and shredded at down $10, "and they would like to be down $30-plus on busheling, but I don't know if they are buying scrap at those levels anywhere. They are still holding open July orders [for undelivered scrap]. They only canceled busheling shippers to certain mills."
A Southeast supplier who was able to sell obsolete at sideways pricing noted that mills would likely attempt to bottom-feed on Friday and pick off any unsold tons as early talk for September is bearish.
"If you haven't sold by close of business today, you will be selling down $10 or more on secondary grades," he said.
