The US scrap pricing outlook for November remains steady for a third week at sideways or stable to lower October scrap settlements, scrap insiders told SteelOrbis this week. The continued unchanged outlook for next month reflects a more bullish scenario for scrap pricing versus recent lower October settles, as annual maintenance operations at domestic steel mills are expected to begin to conclude, potentially requiring more scrap purchases from mills, they said.
And, even as finished steel demand remains unremarkable in the US, and as global economies continue to struggle with tariffs, limited growth, and increased levels of local protectionism, insiders said scrap flows into US Midwest and East Coast supply yards remain steady, with inventory levels once again reported as adequate.
“Rebar to scrap spreads remain near two-year highs,” one US Gulf Coast rebar importer told SteelOrbis. “[The spreads] underscore healthy mill profitability and cost stability.” He continued. “Export flows to Turkey have strengthened slightly, but US domestic scrap remains comfortably supplied, particularly in the Midwest.”
During the recent October scrap supply negotiations, insiders told SteelOrbis that a combination of maintenance activities, low export requirements for US scrap and adequate supply caused scrap prices to dip $10-20/gt ($9.84-19.69/mt) across the board versus September settles.
Based on a current sideways to October settlement, US Midwest prime busheling scrap -which settled on average $20/gt less during October negotiations- could settle for November in the US Ohio Valley at $395-420/gt ($401-427/mt) on a delivered basis, while while shredded scrap, which saw a $10/gt decline, could settle near $365-370/gt ($371-376/mt) delivered. Ohio Valley HMS grades which moved $10/gt lower in October, could trade flat at $315-335/gt ($320-340/mt), while P&S scrap, which settled on average $10/gt lower, could trade for November near $351-361/gt ($357-367/mt).
In the US Northeast, prime busheling grade material could trade flat at $340-360/gt ($345-365/mt), following October’s $20/gt delivered decline, while shredded grades are currently seen steady near $315-325/gt ($320-330/mt) following the recent $10/gt October decline. P&S and HMS grades might finish flat to the $10-15/gt lower October delivered price settles reported near $280-290/gt ($285-295/mt), and $295-310/gt ($300-315/mt), respectively, scrap insiders told SteelOrbis this week.
“It’s the same thing we’re seeing over and over,” said one US East Coast scrap insider. “If demand picks up, [the November outlook] will change, but, we’re not seeing that right now.”
“This has been the quietest I can remember [for scrap discussions] going into a new month,’’quipped another Midwest insider. “However, I’m hearing sideways from the mills,” he said, following a report of a potential $10/gt increase from one Detroit-based scrap supplier. “Nobody is willing to work harder to make $10/gt less at the end of the year.”