Can ferrous price ceiling be pushed?

A monthslong stable recycled steel market in 2024 was not snapped until several spells of winter weather restricted supply in the U.S. late that year.

Now, the industry is watching to see if a midyear 2025 price plateau will remain just as long or be snapped by different circumstances.

Based on domestic mill recycled steel purchases between June 21 and July 20, the Raw Material Data Aggregation Service of Pittsburgh-based MSA Inc. recorded pricing that was flat for two benchmark grades and rose by just $3 per ton for the other.

In the July “World Mirror on Ferrous Metals,” published by the Brussels-based Bureau of International Recycling (BIR), George Adams, CEO of Orange, California-based SA Recycling, says he sees the likelihood of more of the same ahead.

“For recycled steel dealers, the expectation is that less material will support future prices in a supply-driven market.” – George Adams CEO, SA Recycling

Adams describes a healthy U.S. steel industry and a stable manufacturing climate but a less confident household consumer outlook.

“That sets the stage for what could be a protracted period of range-bound prices” for recycled steel, he says. “For now, it appears the third quarter in the U.S. will be relatively quiet, with little driving prices either higher or lower.

“For recycled steel dealers, the expectation is that less material will support future prices in a supply-driven market.”

Adams says the status quo is viewed positively by many in the recycled steel trade. Referring to hot-rolled coil steel prices close to $900 per ton and recycled steel prices around $400 per ton, he says that scenario “is not a recipe for disaster.”

Adams adds, “Mills and dealers have enjoyed both steady business and market liquidity, and there’s nothing wrong with that scenario.”

In the same “World Mirror,” Michael Gaylard of Australian company Sims Metal says the West Coast export market is similarly stable.

“Traditional recycled steel-consuming countries such as Thailand, Vietnam, Indonesia and Malaysia have seen no material change in demand as abundant alternative materials continue to limit shifts in purchasing behavior,” says Gaylard, who works from California. “Import volumes remain broadly in line with 2024 levels, with ongoing buying activity largely confined to containerized shipments.”

While Bangladesh remains in the market for recycled steel, Gaylard says buyers there have been paying more attention to Japan, where volumes have surged 270 percent year on year owing to shorter lead times and more flexible shipment sizes compared with traditional deep-sea cargoes.

As a result, he says, Bangladesh has secured five of the last six export tenders from Japan.

Prices tracked in July and into early August by Davis Index show little encouragement for anyone hoping for an increase in recycled steel value.

Davis Index calculates that throughout the month of June, buyers of bulk ferrous scrap cargoes off the U.S. West Coast paid less than $300 per ton freight on board from the Port of Los Angeles.

That is the only time that monthly average has checked in at less than $300 since at least August 2022, the earliest time frame visible on the Davis Index website.

A ferrous scrap price ceiling in the export market long has been the availability of low-cost semifinished steel slabs and billets as an alternative for rolling mills.

That circumstance is one reason Singapore-based Navigate Commodities announced this summer it has started to track export flows of steel slabs and billets bound for Turkey and departing from more than a half dozen nations.

Navigate Managing Director Atilla Widnell embarked on a two-month “road show” earlier this year to meet with current and prospective steel, raw materials and metal recycling industry customers, which he documented on LinkedIn.

“This was the one constant request I received on our two-month global road show: Can you also track billet and slab shipments to Turkey in real time?” Widnell’s mid-July LinkedIn post reads.

Widnell says Navigate now can track and update every four hours steel billet and semifinished slab cargoes arriving in Turkey that have departed from eight nations: Algeria, China, Indonesia, Malaysia, Oman, Russia, Ukraine and Vietnam.

In early August, Widnell reports that Turkish billet and slab arrivals reached a temporary peak in June but fell “off a cliff” in July.

He adds, “With very few cargoes en route or in transit for August or September discharge, what does this mean for bulk ferrous scrap markets? At some point Turkish electric arc furnace mills will have to dip their toes back into the market.”