Sources close to SteelOrbis have said that while they’re hopeful that US domestic scrap prices will start to reverse course, few, if any, believe that will happen in November.
Prices throughout the US have been falling since they peaked after Russia invaded Ukraine in February, with HMS and busheling prices having softened by more than 32% and 51%, respectively, since early May. And while no one believed that May prices would be sustainable in the long-term, many sellers have expressed surprise that prices have fallen by as much as they have.
On the other hand, factors such as still-unexciting cargo prices into Turkey, short lead times for finished steel products, and falling weekly US domestic raw steel production rates (AISI reports that for the week ending October 15, weekly raw steel production was down by 8.1% year-over-year, are still placing pressure on the market.
“I think November is sideways,” a Southern-based source said. “One supplier has already indicated to me that up money is unlikely. Flows are still relatively stable from what I'm hearing and busheling is still in oversupply.”
Sources in the Midwest agreed with that prediction.
“I think the market will be flat,” the first said, adding that he largely agrees that if mills try to take prices down further, that this will harm scrap yard inflows into November, December, and January, when traditional inflow levels are already negatively impacted by colder weather, hunting season, and the year-end holidays.
The second source said he feels that November prices will be driven by the big electric arc furnaces.
“The integrateds and smaller, independent EAFS are still stuck in the mud and won’t lead anything,” he added. “[There are also] too many [scrap] dealers that can’t get off everything they want to move. I’m hearing that even with weaker prices shredder flow in many areas is sufficient to match demand. Busheling is still oversupplied.”
A final source said that he is hoping for sideways. “[I also] hope that the market is at or approaching the bottom for scrap as we move into the winter.”
Additional clarity is expected by the end of next week.