It has been less than a week since US domestic scrap prices settled, and sources note that all eyes have turned to December. And while those polled don’t agree on where prices may land, the one thing they do agree on is that prices aren’t going down.
“The exporters have raised their dock prices, and if the domestic mills want scrap, in this region at least, they’ll need to raise their prices so they can compete,” an East-coast based source said.
Yesterday, SteelOrbis reported that a US exporter sold a cargo of HMS I/II 80:20 scrap to a Turkish mill for $305/mt CFR, against previous ex-US deals which were transacted at $293.5-296/mt CFR.
“I don’t know if the mills could get away with sideways,” one source said, adding that while he believes it may be “too soon to call” where prices might land, that prices could potentially explode. This prediction is in alignment with chatter heard in early November, when some believed December prices could trend up by as much at $30/gt.
Another Midwest source agreed that next month’s scrap prices will likely trend up.
“I think that [based on things such as] weather issues, COVID-19 issues, and a strong finished steel market—that prices will increase,” he said. “Maybe not by as much as $30/gt but if [the mills] want to run they’ll need to pay up. Freight has been tough. October purchases were late getting delivered, and [there is] nothing like winter setting in to see the [scrap inventory] piles shrink.”
Others believe that yards who have had a good year, “might sit out in December and look to start January in a strong position.” Should this happen, and mills experience a scrap supply squeeze, this could help support an pricing uptrend. The December scrap trade will start in approximately three weeks.