Early July scrap negotiations have brought little clarity regarding pricing direction for the month, market sources said Tuesday.
Many dealers were bullish regarding the potential for price increases, even as some steel mills contended market dynamics do not support any hikes.
Offers this week from US East Coast bulk shippers to sell material inland have emboldened mills seeking sideways pricing.
"I think [there's] too much hype and prices will eventually only be up minimally," one trader said. "Scrap is available, and the exporters are offering scrap into the domestic market in large volumes, so this will cool off the potential increase."
Inland offers from exporters this week for 10,000-25,000 lt of shredded scrap were heard at prices $5-10/lt higher than June pricing, according to market participants. One Northeast bulk shipper was heard to be loading 40-50 rail cars of shredded scrap on Tuesday for shipment to a domestic mill.
"Demand is quite firm heading into July," one Southeast dealer said. "Several mills have already begun to inquire for tonnages and are acknowledging a $15-20/lt move higher. [I] would anticipate the ferrous market developing over the next few days."
Market sources were mixed on when a majority of July transactions would begin to be concluded. The US Independence Day holiday on Friday might drag the traditional procurement period into the following week, according to sources.
"You wait until Monday, that is the seventh of the month, that is a late way to start," another dealer said. "[Prices] ought to be up. It needs to be up based on flows. It should go back up what it dropped in June and get back to May pricing. We are in no hurry to sell, scrap is not coming in."
Multiple dealers said they are aiming for price gains of $20/lt on shredded scrap and $10/lt on cut and prime grades.
"Flow has been good, but demand continues very strong," one Ohio Valley dealer said. "EAF flat [mills] are the driver."
June shredded scrap prices settled around $370-375/lt delivered Midwest mill.
"Dealers are talking the market up, but I think that could cool a bit as people start talking tons," one mill buyer said, pointing to June material positions, better-than-expected flow, lack of exports and better-than-expected automotive scrap volume.
