After a three-month downturn in the US domestic scrap market, October scrap trading in the US domestic scrap market encountered an upward trend of generally $10/gt ($10/mt) up in cut grades such as shredded, HMS I and P&S, and $20/gt ($20/mt) on busheling scrap, compared to September settled prices. SteelOrbis recently reported settled prices in the Midwest and East coast.
According to a survey by SteelOrbis, scrap contacts are expecting a flat to positive early November scrap trading cycle. Those that expect a sideways trend point to a “few consumers who are adjusting their buying plans slightly downward, although, not at any alarming rate,” while factoring in winter weather scrap feedstock changes.
Those scrap sellers that expect a slight upward trend point to continued strong demand, winter feedstock declines, and the buildup of “safety inventories” due to upcoming holidays in both November and December. A source stated, “Unlike previous years when steel companies sought to tighten at the end of the year on cash flow management, I do not believe that such will be their driving force this November and December as business is good and the transport system still has its challenges.” One source tamed his expectations for a robust upper price movement as he noted that he was unclear whether steel buyers are awaiting softer pricing or if steel makers are getting their finished inventories right-sized.
SteelOrbis was also informed of the potential for a solid increase of $10-20/gt ($10-20/mt) across all grades in November by several sellers in the Midwest. A source in the region supported his expectations with comments on the tight scrap inventories at several of the mills in his region, continued inquiries by mills for scrap buys beyond the early October trading week, and the probability that mills will not take “much down time over the November and December holidays.”