Ferrous Market
The bearish sentiment that emerged after the conclusion of the February domestic ferrous scrap trade has persisted and does not seem to be ending anytime soon. This negative sentiment has been widespread, not only in our domestic market but also in the international market, where steel mills continue to grapple with weak demand for their finished steel products. In the last few days of February, domestic mills issued cancellation notices to suppliers for unshipped scrap, which could be a sign of what the ferrous scrap market will face in the March price negotiations.
Once again, the domestic mills have delayed their negotiations for their March buying programs.
It seems that the factors that caused the price of domestic ferrous scrap to drop in February have continued to affect the market in March as well. The export market has not provided any support and steel mills in countries like Taiwan, Vietnam, Korea, and Turkey are all experiencing low demand for their finished steel products. Additionally, Mexican steel mills are not purchasing scrap from the United States this month. Scrap suppliers are hoping that the “rule of 3” will hold true, which suggests that the domestic ferrous scrap market will recover after three months of decline, meaning it may have bottomed out in March. If not, market analysts anticipate that the weak scrap market conditions will continue for the next 60 to 90 days.
Non-Ferrous Market
In the non-ferrous market, the terminal markets for aluminum and nickel have been relatively inactive, with trading occurring within narrow ranges. However, Comex copper prices have seen a surge in the last 30 days, thanks to the positive news on stimulus measures from the Chinese government and favorable domestic macroeconomic data.
There has been a significant increase in demand for copper from Chinese consumers, which has caused the price of Comex copper to rise by $0.22 per pound in the last 30 days. As a result, consumers in the U.S. and EU have had to raise their buying prices in order to remain competitive. This same trend is seen in the market for red and yellow brass, as both domestic and overseas consumers compete for the limited supply of red metals worldwide.
The price of LME nickel has risen by $2,335 per metric ton in the past 30 days, which has provided some support to the prices of 300 series stainless steel. During the same period, the prices of 304 stainless steel have slightly gone up ($0.04 per pound) due to a rise in mill demand and limited scrap flows.
Over the last 30 days, the LME aluminum prices have traded within an extremely narrow range and have ended up at $22 MT. The Midwest premium has remained stable at $0.1745 lb. Scrap prices for extrusions and segregated alloys have stayed flat, despite slowing increasing mill demand. Some secondary grades have shown slight improvement in prices due to increased demand from India and domestic consumers.
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