Although players within the US domestic scrap market are mixed on their thoughts as to where the market will settle next month, for the most part sources agree that prices are likely to rise.
“I think it’s going to be more about lack of supply than it is about upticks in finished steel demand,” a source said. “Demand for finished steel just isn’t there, but with scrap prices where they are, yard inflows are way off. The disruption in the supply chain is what’s going to drive this.”
And while other sources agree that an uptrend is on the horizon, they’re split as to how far up market prices will settle. Last week, the most commonly heard prediction was that scrap would trend up between $10-$20/gt ($10-$20/mt). This week, however, rumors that prices may settle up by $20-$30/gt ($20-$30/gt), have circulated throughout the market.
“Sure, I think the number of people who are in the up $20-$30/gt camp are fewer and farther between, but there’s definitely some of us out there,” a source said. “Considering the way the market has been for the past two months, I don’t think people are exactly lining up to be optimistic.”
Another source agreed and disagreed with the possibility of an up $30/gt market, offering two competing viewpoints. “On one hand, a lot of people might argue that the mills aren’t going to be willing to give it up and accept an up-$30/gt market” he said. “On the other, there are a lot of hanging price increases out there, for pretty much everything, and mills’ ability to get those pushed through will largely depend on where scrap settles. With that in mind, maybe they wouldn’t push back too hard at up $20-$30/gt.”
Yet despite some believe that the market could land at up $30/gt, the most commonly heard prediction has the market settling up $10-$20/gt. Clarity is not expected until mid-next week.