US Ferrous Scrap Market Bullish Due to Supply Constraints

SEATTLE (Scrap Monster): The US ferrous scrap market experienced a bullish trend in February, with a Trend Indicator rising to 69.5, signaling strong expectations of price increases. Further analysis from Fastmarkets suggests that this marks a continuation of January's upward trend, bolstered by a forecasted 3.2% month-over-month price increase. This growth is largely driven by lower supply levels, with inventories standing at 49.0, indicating constrained availability relative to demand.

Supply Constraints and Export Dynamics

The supply constraints are exacerbated by seasonal weather conditions and logistical slowdowns, causing mills to struggle with securing sufficient tonnage. Despite weaker intake at scrap yards, both brokers and sellers remain optimistic about price firmness, with trend indicators of 75.0 and 69.7 respectively. Moreover, the primary force behind price support currently stems from domestic consumption, though export demand remains a key factor. Relevant data from IndexBox reveals that the United States exported ferrous waste and scrap, particularly of cast iron, valued at USD 194.4 million in 2024, a notable increase from USD 174.1 million in 2023. India was the leading export destination in 2023, receiving ferrous scrap worth USD 63.9 million, followed by Malaysia and Thailand with USD 23.3 million and USD 21.6 million respectively. While import values were significantly lower, at USD 76 million in 2024 from USD 56.2 million in 2023, Canada was the top import partner in 2023 with USD 42.3 million. This reflects a trend of increased export over import, consolidatin the US's role as a significant exporter of ferrous scrap.

Future Outlook and Challenges

With market consensus aligning around tightening supply as the primary factor, the price trajectory remains uncertain; however, the upward momentum appears set to continue into March. Continued winter delays or unexpected demand spikes could further push prices upward, maintaining the bullish market sentiment.

Courtesy: www.indexbox.io