It’s been less than a week since US domestic scrap prices settled for November, but chatter about the potential December price trend has already begun to permeate the market.
“I think December is going to show some strength,” an East coast source said. “I think the market was way undervalued and that there’s still a lot of room for it to come up. At this point, I think up $10-$20/gt ($10-$20/mt) could definitely be in play. On the other hand, we have to see a lot more business coming from the domestic mills in order for that to happen. Right now, exporters have the advantage [in terms of getting scrap inflow] because they’re paying prices are higher.”
In the Ohio Valley, multiple sources agreed with an up market in December, but were a bit more bullish with their sentiment. “We think that by the end of the year, the market could be up by as much as $50/gt ($51/mt) from where we were in October,” a source said. “So up another $20-$30/gt ($20-$30/mt) in December. Prices have to go up because yard inflows need to stabilize.”
A second source agreed. “I think up $10-$20/gt ($10-$20/mt) is a given, but I wouldn’t be at all surprised if we settled at up $40/gt ($41/mt),” he said. “I personally don’t think up $20/gt ($20/mt) is enough, but who knows what’s going to happen. What I can tell you is that the bad weather may not have rolled in until this week, but prior to that, with these low low prices, there’s no scrap out there. If I had to go out and buy shred right now, I’m not sure if I could do it at up $30/gt ($30/mt) because it’s just not there.”
Others say they’re not ready to call anything just yet. “I’m not settled on anything in my mind about December. Not yet,” the source said. “My sense is there may be some strength, but it may be regional. The energy [pipe] market is still rather poor, and I don’t see that changing anytime soon.”