In the latest developments within the steel market, structural producers took a significant step last week, opting to increase their prices by $50 per short ton – a move that arrived later than expected. As a consequence, all long product producers are now actively urging their customers to embrace price hikes ranging from $50 to $80 per short ton compared to the rates observed in November.
Despite this upward trend, early indicators suggest a softening in scrap steel pricing, particularly in obsolete grades. After enjoying three consecutive months of robust gains, there are clear signals that shredded scrap prices might witness a notable decrease of up to $20 per ton by the close of this week. This potential adjustment begs the question: how will this impact the ongoing but delicate trajectory of price increases?
The possibility looms large. The initial surge in prices stemmed from the necessity for mills to recoup some of their escalating costs. With that pressure now alleviated, a certain degree of flexibility in price adjustments is anticipated. As customary, mills will be discerning in choosing which stakeholders stand to benefit from these adjustments.
Shifting our focus to the import side, the market is yet to witness any compelling offers. Notably, Mexico maintains higher pricing for rebar and wire rod, resulting in diminished orders. On the flip side, Canada continues to showcase robust activity, maintaining competitiveness in its exports to the US.
Despite the provisions of the US-Mexico-Canada Agreement (USMCA), imports remain relatively high-priced, lacking the allure seen in domestic markets. Ukrainian melted products present a potential wildcard that could disrupt the status quo, but widespread availability is not yet confirmed.
In this dynamically evolving scenario, sellers aiming to optimize their returns on excess steel or scrap steel inventory should remain vigilant and proactive. Key considerations for effective selling include timely adjustment to market fluctuations, strategic pricing to navigate competitive landscapes, and exploring potential international markets with the right pricing dynamics. As the market continues to unfold, sellers must stay adaptable to emerging trends to make informed decisions for successful and lucrative transactions.