In the early hours of Tuesday, October 1, scrap market sources throughout the US said that early scrap trading numbers on the East coast were hovering at down $30/gt. In the Ohio Valley, sources said that while trading in that region had not commenced yet, it was believed that prices in that region could be closer to down $40/gt. Full clarity in the Ohio Valley market is not expected to emerge until Thursday or Friday of this week.
“No one seems to be willing to act as drum major,” a source said, indicating an absence of mills taking the lead in the scrap market. “Mills are still assessing their needs and they’re still looking at receipts and cancelations to determine their programs.”
This morning, sources reported that the market was still pointing downward. One source in Detroit thought that prices in that region could come down by as much as $50/gt from September prices, although “it’s still too soon to tell where the market will settle. There’s just not a lot of good feeling about the [domestic] steel industry right now.”
Prices on the East coast, sources note, are trading down more today than they were yesterday.
“It’s our expectation is that the market [on the East coast] will be down $30-$40/gt from September,” a source said. “Multiple mill maintenances in October are going to limit the domestic buy across the board. Limited export cargo sales have capped any chance of a soft landing for October. And while export activity has picked up some in the past week or so, with more US cargoes, it’s not helping with October’s domestic numbers. If export continues, this should level out the domestic market for November, or at least that’s what we’re hoping.”
Another source was also hopeful that November will be stronger, “once the domestic mills are back in full swing.”
“It’s bad out there right now,” another source added. “Hopefully it will get to the point where mills have depleted their [scrap] inventories, the weather will start to get colder and what’s going on this month with the market will force a rebound next month. For now, all we can do is hold onto our hats and glasses.”