Latest predictions for US scrap prices in October

Wednesday, 18 September 2019 19:15:54 (GMT+3)   |   San Diego
       

Despite widespread suspicion that a continued downtrend in US scrap prices may lead many scrap collectors to temporarily step away from the market, US domestic scrap prices are still expected to trend downward during the October buy cycle.

“We’re still getting 70-75 percent of our usual intake, despite softer prices but we’re at the point where we may hit a wall,” an East coast source said. “If prices go lower, scrap collectors aren’t going to want to collect. Even now with some of the big demolition jobs that are going on, what’s being scrapped isn’t being shipped into the market. People are holding it until prices come back up.”

Another source agreed, adding that despite the potential of lessened scrap intake, current scrap inventories are healthy.

“The [financial] return on what people are bringing into the yards isn’t great, especially considering the market went deeper than everyone thought it would go in September,” he said. “In the short term, I don’t think lessened collection will matter too much based on mills’ planned outages. That, and the mills have good inventories for both scrap and finished product.”

Planned steel mill outages in October are still expected to weigh on demand, another source added, noting that this was a large contributing factor to this month’s price decline.

Yet despite many describing the market as sluggish and a widespread consensus that short-term recovery is unlikely, others are seeing small spots of hidden strength. One Ohio Valley-based source indicated that in the past week, he’s seen buyers “quietly coming back in” to purchase more tons.

“They’re trying to buy down $20-$30/gt from August prices, as opposed to the down $30-$40/gt that we saw earlier in the month,” he said. “We still think the market is soft, but it may not have much more room to go down.”

Current expectations for October scrap pricing are consistent with what was predicted last week, with settled prices expected to trend down by approximately $10-$20/gt month-over-month. Decreased demand for finished steel in Q4, combined with the recent correction for US HRC prices, will both play a role in October pricing.  

 


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