US scrap market sentiment eroded further Tuesday as numerous mills canceled unshipped August dealer scrap, Turkish scrap import prices fell sharply and coastal scrap flowing inland emerged as another threat.

Numerous Turkish scrap imports this week from EU merchants brought the tradeable value of US exports to Turkey below $230/mt CFR HMS 80:20 basis. Market sources also observed exporters offering to ship domestically.

Estimates for September pricing settlements ranged Tuesday from sideways to a drop of as much as $15/lt. Platts maintained its daily Midwest shredded scrap assessment at $230-$245/lt delivered mill.

Some dealers continued to maintain sideways price expectations due to a drastic reduction in available material. Others believed any potential work stoppage at integrated mills negotiating new labor deals with the United Steelworkers union would bolster electric arc furnace scrap buying programs.

"It appears East Coast shippers remain skittish and are working to place more tons domestically," one dealer said. "However, I believe dealers with stronger balance sheets may wait things out a bit to see how the United Steelworkers negotiations transpire over the week. Any hiccups at the integrateds could bring stronger demand from the EAFs that are working with limited scrap inventories, particularly on cut scrap."

One dealer said he "was thinking sideways early last week. Now, I believe it may go down $10 in the Southeast. I think by close of business tomorrow, the major trading will be completed."

Steel mill capability utilization dropped to 71.2% from 72.9% last week and sheet pricing has yet to gain traction after the filing of three trade cases over the past two months.

Despite anticipated pricing pressure, some consumers were in the market buying at sideways levels early this week.

"The economic uncertainty could have an effect," one mill buyer said. "But, I think if scrap is down, dealers will hold and mills might end up short."

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