Ferrous scrap prices are expected to drop sharply in April as a result of all the market disruptions from the coronavirus. How sharply is unclear. Almost certainly lower scrap prices will add to the downward pressure already being felt on finished steel prices.
By CRU Prices Analyst George Pearson, from CRU’s Steel Monitor
In the U.S. Midwest market, sheet prices were split this week. The price of HR coil fell $21 /s.ton to $561 /s.ton while CR and HDG coil prices fell by only $1-$3 /s.ton to $770 and $747 /s.ton, respectively. The spread between HDG coil and HR coil is now $186 /s.ton, an increase from $168 /s.ton last week.
The following article on the hot rolled coil (HRC) steel and financial futures markets was written by Jack Marshall of Crunch Risk LLC. Here is how Jack saw trading over the past week:
Preliminary steel import license data for February, released this week, slipped to the 1.5 million net ton range for total steel imports, according to the U.S. Department of Commerce. Steel Market Update's last import update just one week ago had February imports at 1.9 million tons. This is the lowest monthly import level seen since December 2009 when final imports were at 1.4 million tons. Final February data usually varies only slightly from these preliminary figures, but the early effects of the coronavirus on the economy make this data unpredictable.
Unemployment claims skyrocketed to nearly 3.3 million last week, compared to 282,000 filings the prior week. The number of Americans that have lost jobs due to the coronavirus is staggering. As governments shutter nonessential businesses and ask employees to stay home, companies have been forced to lay off and cut jobs for an unprecedented number of workers.