Ferrous scrap prices have exhibited a downward trend in August as portrayed by transaction figures for the first three weeks of August collected by Pittsburgh-based MSA Inc. for its Raw Materials Data Aggregation Service (RMDAS).
RMDAS pricing for August shows No. 1 heavy melting steel (HMS) prices dropping $22 per ton in August and shredded scrap declining $21 in value. The two grades, which also are most commonly exported, declined by similar or slightly higher amounts in the RMDAS North Central/East region, where Turkish mill buyers have their greatest influence.
Economic and steel industry-specific woes in Turkey are being cited as a reason for ferrous scrap price declines in the face of a domestic steel industry in the United States that has shown steady growth in output in 2018.
American Metal Market (AMM) surveyed pricing released after the early August buying period showed lower index prices for all major grades—with the steepest drop of $25 per ton experienced by East Coast exporters.
The value of the Turkish lira and expectations for the Turkish economy are dropping after questionable decisions by that nation’s president Recip Erdogan and increased metals tariffs against Turkey imposed by the Trump administration.
By the second week in August, it may have become clear to mill buyers throughout the United States that scrap recyclers in the Northeast would have plenty of shredded and HMS scrap available to serve the domestic market.
A sequence of second-quarter earnings reports from U.S.-based steelmakers, including two of the largest electric arc furnace (EAF) operators, demonstrated just as clearly they are operating at a profit.
In late July, Charlotte, North Carolina-based Nucor Corp. reported what it refers to as record-setting second quarter profits in 2018 and a first half of the year that saw it reap $1 billion in net income.
About one week later, another EAF steelmaker, Fort Wayne, Indiana-based Steel Dynamics Inc. (SDI), reported second quarter 2018 net sales of $3.1 billion and net income of $362 million. That second figure topped its first-quarter 2018 net income of $228 million, representing a 59 percent boost in profits.