Only small hints point to a rebound

Some domestic mill and overseas brokerage transactions in late August and early September offered glimmers of hope that steel scrap prices could rebound before year-end.

Pittsburgh-based MSA Inc.’s Raw Material Data Aggregation Service (RMDAS) report covering domestic mill transaction pricing from July 20 to Aug. 19 included some per-ton averages that increased, if only modestly. In the RMDAS midsummer buying period, benchmark ferrous scrap grades held their value and even rose $2 to $5 per ton nationally.

In late July and the first three weeks of August, domestic mills paid $5 more on average per ton for No. 1 heavy melting steel (HMS) than they did in the prior 30-day period, representing the largest price increase for shippers.

Through Aug. 31, the more than 59.3 million tons of crude steel made in the U.S. is 2 percent less than the more than 60.5 million made in the same period last year. – American Iron & Steel Institute data

During the same period, shredded scrap increased $2 per ton nationally, and mills paid $3 more per ton on average for prompt industrial composite grade scrap.

However, the increases did not boost any benchmark grade to more than $400 per ton. Mills in the 30-day stretch paid $396 per ton for prompt scrap, $381 per ton for shred and $326 per ton for No. 1 HMS nationally.

Among those grades in the RMDAS South, North Midwest and North/Central East regions, seven gained $1 to $8 per ton, while the value of shred in the North Midwest remained unchanged and No. 1 HMS in the South lost $1 per ton in value.

The biggest price increase was for prompt scrap in the South, going from $384 per ton in late June and early July to $392 per ton in late July and early August.

In initial post-Labor Day weekend trading tracked by Davis Index, another hopeful sign appeared via an offer on the East Coast to buy an HMS cargo for $2.75 per metric ton more compared with the pre-Labor Day price.

It marks the fifth small price increase in that bulk cargo market since it hit a recent low of $323.90 per metric ton in late August.

As of Sept. 4, Davis Index had not recorded any price increases for bulk HMS cargoes shipped from Los Angeles for several weeks. Instead, tracking in that market reveals a series of price declines between mid-June and early September.

Domestic demand for finished steel and ferrous scrap has been in a mild slump throughout much of the year, with the Washington-based American Iron & Steel Institute (AISI) reporting a 2 percent drop in steel output in the U.S. in the first eight months of 2024 compared with the same time frame last year.

Through Aug. 31, the more than 59.3 million tons of crude steel made in the U.S. are 2 percent less than the more than 60.5 million tons made in the same period last year. Mills also operated at 76.6 percent capability utilization (capacity) rate compared with 77.2 percent in the first eight months of 2023.

Steady momentum to boost those figures has been difficult to obtain. However, in the last week of August, the 1.76 million tons produced represents a 1 percent increase over the comparable week in 2023. Mills operated at a 79.2 capacity rate the final week of August.

Like the steel industry, the construction sector—one of the largest buyers of steel—has roughly maintained its spending activity levels compared with last year’s.

The Arlington, Virginia-based Associated General Contractors of America reports construction spending in the U.S. declined 0.3 in July compared with the prior month, driven by declines in private residential and nonresidential construction. The automotive sector demonstrated a similar “steady but not surging” market the first eight months of the year.

According to Michigan-based Wards Intelligence, the sector is on track to sell about 15.13 million cars and light trucks this year. That forecast is down 2.1 percent from the 15.46 million unit figure Wards calculated for 2023.

In better news, more than 1.4 million vehicles were sold in August, up from 1.32 million sold in July.

How and where steel is made is the focus of the proposed Modern Steel Act.

The bill, which has been backed by Cleveland-Cliffs, the United Steelworkers and the AISI, is described as a way to help fund new iron and steel plants in deindustrialized towns, bring next-generation steel back to the U.S., strengthen domestic manufacturing, create good-paying jobs while retaining existing ones and increase U.S. industrial competitiveness globally.

Cliffs President and CEO Lourenco Goncalves says the bill would provide tools to ensure the U.S. steel sector maintains its “clear leadership position.”