US inland scrap prices dealt another blow as they settle down again in October

October turned out to be another difficult month for scrap dealers in the US.  Sources close to SteelOrbis report that the scrap market settled approximately $15-20/mt ($15-20/gt) down across all grades in the East Coast and $10-20/mt ($10-20/gt) down on cuts and $25-30/mt ($25-30/gt) down on prime grades in the inland regions.  The numbers met the latest expectations, but, nonetheless, proved a harsh reality to dealers.

The uncertainty in the scrap market is evident per comments from one large scrap trader in the Ohio Valley who noted, “Market settled down as expected.  Probably at bottom for now, but it is difficult to read if it is a false floor or a real one.  It is too early to tell.”  Another dealer commented, “Mill orders are definitely coming up short and it is hard to imagine an increase at year-end.”

Sellers are divided in regards what is in store for the remainder of the year.  One perspective is that the continued gap closure between import and domestic pricing of finished steel in the US could actually benefit domestic scrap demand and pricing as imports of finished steel and scrap become less attractive.  On the other hand, some fear that inventory controls at mills will tighten further as year-end planning approaches and the resulting limited demand for scrap will further erode prices in November and December.  Of special concern in the industry are the suppliers with surplus inventories and in need of cash flow that may place additional downward pressure on scrap prices. 

Below are the settled prices for various regions in the US.