US domestic scrap prices plummet in November

US domestic finished steel demand, and in turn domestic scrap demand, has been lethargic in the last couple months as steel buyers' inability to forecast market trends for more than a week or two at a time has kept purchasing activity extremely cautious. With domestic flat rolled spot prices dropping substantially throughout October, scrap brokers tell SteelOrbis that mills pushed strongly for lower prices in November and busheling scrap prices fell about $50/lt ($49.21/mt) in early November in both the Midwest and East Coast.

While low demand was a factor for domestic shredded scrap prices as well, rapidly softening ex-US export scrap prices to both Turkey and the Far East throughout October pushed a decline of about $30/lt ($29.53/mt) in domestic shredded scrap prices in early November. HMS I scrap prices also fell as a result of major declines in export prices and came down by about $25-$30/lt ($24.61-$29.53/mt) in early November in both the Midwest and East Coast.

Scrap flow into yards has dropped in November as well, with one broker telling SteelOrbis that "flow has fallen off about 30 percent," as mills are keeping tight scrap inventories--not buying one ton more than their needs require--and brokers are hesitant to selloff their available scrap. While it is too early to predict scrap prices in December just yet, little positive change in demand is anticipated this month, and so early speculation points to a neutral to slightly down trend in scrap prices next month. January is traditionally a stronger month for domestic scrap prices, as transportation hindrances that occur in the winter months as a result of inclement weather have a tendency to drive up scrap prices--a main reason why brokers are holding tight to their scrap supplies at the moment.