A few early deals done in the past week are pointing to another major decrease in US scrap prices during early October buys. One major late September deal in the Midwest reflected a decrease of $45/lt on shredded scrap. At the time, sources said that it was unlikely that the decrease would set the tone for the overall market, but now a sharp drop appears to be on the horizon. Despite the decrease in scrap prices in September, flows remained steady and continue to remain as such. However, finished steel demand throughout September has been especially lackluster and prices are tumbling at a rapid rate. Flat rolled spot prices have been on the decline throughout September and the price softening isn't anticipated to let up anytime soon.
Prices and demand for long products have also been far from stellar in recent weeks and mills for certain steel products (most flat rolled, according to sources) are taking some outages in October, which will consequently reduce scrap demand. Further, while scrap export activity off the US East Coast has been decent the past few weeks, US West Coast scrap exports are still minimal; ex-US scrap prices to Turkey have slipped slightly again over the past week and no sudden upward trend is expected. As a result of multiple negative factors, US scrap dealers are preparing themselves for a decrease in prices during October buys. It will take at least another week for the market to settle, but speculation is pointing to a drop anywhere between $20-$50/lt, with the steepest declines predicted for the Midwest.