We’re half way through 2021 and the weather is not the only thing heating up. The US ferrous scrap market is approaching record high with signals of more upside for the second half of the year. Non-ferrous markets have also stabilized after a slight price correction.
Chicago’s ferrous scrap market settled up $40 – $60 per gross ton from May to June. Strong steel demand, mill expansions, waning supplies, high pig iron prices and a flurry of export activity added to the bullish outcome.
June is the first month No. 1 busheling, known as prime scrap, has increased since March of this year. Since March, steel mills refused to pay more for primes, knowing that no amount of extra money could drive out more supply. Prime grades remain in short supply as automakers continue to face production disruptions in the wake of a semiconductor shortage. Mills have also increased their usage of cut grades and shredded scrap to mitigate the impact of less busheling being generated.
Most non- ferrous commodities declined approximately 5 percent at the onset of June and trading has resumed now that prices have settled. “The semiconductor shortage, transportation bottlenecks and Covid-19 restrictions overseas are impacting domestic non-ferrous scrap markets,” states George O’Brien, Director of Non-ferrous. Most consumers agree trading and pricing will remain at the current levels for the balance of June as demand for non-ferrous scrap is strong, order books are healthy and domestic consumers have depleted inventories.