According to several sources, the scrap market was “delayed” this week as mills did not enter the market until late Tuesday and other mills remain in the sidelines as of Wednesday. According to sources close to SteelOrbis, as discussions and deals surface, it is becoming evident that “expectations are being met of scrap prices down, although, at different discounts depending on grade and region.” Reportedly, the Midwest and Pittsburgh scrap prices are being “hit the hardest inland” at the moment. Mill offers are reportedly as low as $40/mt in some cases against an initial expectation of down $20-30/mt.
As noted previously by SteelOrbis, reduced buying was expected due to planned maintenance outage schedules. The reduced buying programs on ample inventory and/or reduced capacity needs are placing pressure on scrap dealers to agree to lower prices. The spread between busheling scrap and shredded scrap is expected to narrow this month.
Spring board deals – the practice of bringing in scrap from outside the region – are not expected to play a role in the October buy-cycle. As one East coast dealer noted to SteelOrbis, “Yes, market is delayed, but I do not believe that scrap will move west from the East coast.” The same input was received from Texas and Midwestern sources who also believed most scrap deals would remain regionalized. A trader in Pennsylvania noted, “Yes, prices are down for entry into October, but no need to allow a downward frenzy. Feedstock is also being reduced, though shredded is a little plentiful, and we can hold on to some inventory.”
According to an Ohio scrap trader, “Rising costs for graphite electrodes, refractories and ferro-alloy in recent months have led to production cost increases of $40-55/mt at mills per several industry calculations, therefore, mills have an additional short-term consideration as they balance their input costs.”