US ferrous scrap dealers and mill buyers are maintaining different opinions on how high scrap prices should rise in April, potentially preventing April buy week negotiations from wrapping up this week ahead of a major industry convention next week.
Mill buyers have conceded that there will be a significant increase in scrap prices in April but most are resisting any push beyond a $30/lt rise. Some dealers believe prices could jump $50/lt or more.
"I think some mills would like to [settle] by Friday," a Southeast scrap supplier said. "It is possible Detroit and possibly some in the Midwest may be able to. Looks to me like the majority of the trade will not get done until Monday or possibly Tuesday."
He said trading could begin this week if mills enter the market at the top end of pricing expectations, up $40-$50/lt, whereas if they enter with offers $25-$30/lt higher it could push the buying into next week.
"There are offers out there," one scrap supplier said. Dealers "are putting offers out there at up $40[/lt]."
The annual Institute of Scrap Recycling Industries convention begins next week in Las Vegas. "It is going to be a crazy week next week," a Midwest broker said. "I think dealers for sure want to sell this week, but no mill is chomping at the bit to pay up $50[/lt] for scrap today."
Platts daily assessment of shredded scrap moved up $10/lt Tuesday to reflect bids, offers and market sentiment. The assessment is now at $230-$250/lt delivered Midwest mill for shredded scrap. The assessment is up $30/lt since early March.
"Dealers are trying to make the decision to sell at $30 or go for broke and get $50," another broker said. "This will be a spot waiting game, in my opinion not much happens before the convention unless Nucor moves hard."
Many mills were in the market late last week and this week seeking scrap commitments for April deliveries on a pricing to be determined basis while dealers were resisting any commitments without a price attached.
"The [inquires] from mills that we saw late last week, was almost indicative of a buy and sell week," a Midwest dealer said. "Mills are concerned about volume. They all want more than last month and I don't think they are going to get covered in April. If they were up $50 it may happen this week."
One Midwest mill buyer said there was a "decent" chance at negotiations settling this week. "The market seems to be waffling between up $30 or up $40 with quiet offers above this," he said.
