December US scrap pricing is being called mostly sideways in early market discussions with scrap buyers this week, though some suppliers told SteelOrbis higher prices are a distinct possibility, given the fact that many mills will have completed their annual maintenance operations by the start of December supply negotiations and could be in the market for more material next month.
During September, October and November, most US mills perform scheduled annual maintenance, reducing their need for scrap while mills remain shuttered. During September, scrap prices settled sideways to August values, while October saw a $10-20/gt dip in pricing across all scrap grades and regions. Recent November settles showed scrap mostly sideways once again, though Midwest busheling moved lower, as workable trading ranges narrowed, amid reports of plentiful supply in local markets, scrap insiders told SteelOrbis. Other grades finished solid sideways across all grades and regions.
“Right now there’s not much talk of December scrap going on in the market,” said one Midwest scrap insider. “More than likely it will settle sideways.” Another Midwest scrap broker said, “There’s nothing new to report yet on December, so we see it sideways.” Still, another Midwest mill buyer said, “I’m calling it sideways now, but that call is too easy because it’s early.” A Detroit-based supplier suggested potentially higher pricing. “We see the December market possibly up $10-20/gt for Midwest shred.”
While higher prices are a possibility, based on a developing consensus for a sideways to November settlement, US Midwest prime busheling scrap -which settled on average $18/gt less during November negotiations- could finish for December in the US Ohio Valley near $385-395/gt ($391-401/mt) on a delivered to mill basis. Midwest shredded scrap, which is called flat to potentially $10-20/gt higher, is likely to finish for December at or above its November settlement at $365-370/gt ($371-376/mt), though a solid market call remains inconclusive as buyers and sellers remain far apart. Ohio Valley HMS grades which finished sideways for November, are likely to settle flat again near $315-335/gt ($320-340/mt), while P&S scrap, which settled flat this month, could settle near its November close at $351-361/gt ($357-367/mt), scrap insiders told SteelOrbis.
Again, while it remains early, in the US Northeast, December prime busheling grade material is expected to settle flat near $340-360/gt ($345-365/mt), following its November sideways settlement, while shredded grades are now seen sideways to November near $315-325/gt ($320-330/mt). P&S and HMS grades could finish flat to the sideways November settles near $280-290/gt ($285-295/mt), and $295-310/gt ($300-315/mt), respectively, scrap insiders told SteelOrbis.