As ferrous scrap processors worked to recover from an unseasonably wet spring and mills feasted on the glut they’ve stocked at the lowest prices of the year, ferrous scrap values took another deep cut in May.

On average for the May buying period, domestic prices as calculated by Fastmarkets AMM sunk nearly $30 per ton, with No. 1 busheling grades valued at $350.50 per ton in the Midwest. Prices have hit a new low this year as lesser quality grades tumbled nearly $50 from this time last year.

While May brought a healthy amount of demolition activity to keep scrap dealers supplied, it also brought an unusual amount of rain in some areas of the U.S. that slowed down operations or, in some cases, halted them altogether.

A scrap processor out of the Midwest says one heavy overnight shower early in May “wreaked havoc on our ability to process scrap,” flooding his company’s rail service and creating problems with torching that “pretty much halted operations for about 24 hours” and affected processing for weeks afterward.

“My gut feeling is [low prices] will continue through the summer.” – a New York trader

Though summer sun will help with operations, its effect on pricing is still to be determined. Scrap processors are hoping May marks a bottom for pricing as the rain dissipates in June, though some think the downward trend will keep sinking through the season. “My gut feeling is this will continue through the summer,” says a ferrous scrap trader based in New York.

Domestic mills have taken advantage of the low pricing by stocking up throughout the spring, which likely will result in weak demand throughout the summer, sources say. Scheduled mill shutdowns for maintenance and upgrades are expected to contribute further to a downturn in demand, especially in certain regions, such as the Midwest.

Scrap processors are hoping the low prices will reduce oversupply as peddlers hold onto obsolete materials until ferrous scrap prices improve. However, many say they aren’t expecting prices to stabilize until late fall, when mills begin stocking up again for the colder months.

Overseas importers have taken advantage of the low pricing recently as well. Fastmarkets AMM reported in mid-May that a steel producer in Turkey purchased 25,000 tons of various grades of ferrous scrap because of the low prices.

However, daily scrap indices fell even lower in the U.S. that day as Turkish buyers have kept purchases slow enough to put pressure on U.S. ferrous scrap prices as that country grapples with internal uncertainty.

As Turkey recovers from a recent recession, the New York-based ferrous scrap trader says the country’s economy bears resemblance to a cat with nine lives. “The question is, how many lives are the Turkish down to?” he asks.

While Turkey has ramped up its industrial production, economists are cautioning that the country could experience a “double-dip” in its economy, according to a Bloomberg article, as an election redo threatens a new era of political turmoil and the value of the Turkish lira continues to waver—brought on, in part, by poor relations with the U.S., which led to a 50 percent import tariff on Turkish steel last year.

U.S. steel mills, which have benefited from the Section 232 tariffs that Trump imposed on steel imports last year, remain healthy as their capability utilization rates continue to creep up. The American Iron and Steel Institute (AISI) of Washington says year-to-date production through May 11 was about 1.9 million net tons, while the capability utilization rate was 82.8 percent, representing a 0.6 percent increase from the previous week and a 6.6 percent increase from the same period last year.

After recent announcements that new minimills will soon be cropping up around the country—from a $1.4 billion Nucor mill in the Midwest to a $1.8 billion Steel Dynamics mill in the Southwest—U.S. Steel of Pittsburgh recently announced a slightly different venture of its own. The company says it will invest more than $1 billion to construct a sustainable endless casting and rolling facility in Braddock, Pennsylvania, as well as a cogeneration facility in Clairton, Pennsylvania, which together comprise its Mon Valley Works.

As opposed to using an electric arc furnace, like the other recently announced plants, the new mill from U.S. Steel will use a blast furnace to produce its steel, a method that tends to use less scrap. U.S. Steel says the integrated facility will be the first of its type in the U.S.

“We are combining our integrated steelmaking process with industry-leading endless casting and rolling to reinvest in steelmaking and secure the future for a new generation of steelworkers in western Pennsylvania and the Mon Valley,” U.S. Steel president and CEO David Burritt says in the May 2 press release announcing the construction projects.