In the past several days, both General Motors and Stellantis have announced they have reached a tentative agreement with the United Auto Workers Union (UAW). Once these agreements are ratified by union members, the weeks-long strike against Detroit’s automakers will officially come to an end.
Last week, sources were optimistic that news of UAW’s agreement with Ford Motor Company would have a positive impact on November scrap prices. But now that the strike against all three companies appears to be nearing an end, that optimism is growing.
“I think [the end of the strike] is going to increase demand and have a positive impact on [all scrap grades] in November,” a first source said, while a second said attendees of last week’s ISRI meeting in Ohio had a fair amount of optimism with respect to November prices.
He believes that primes, which were previously forecast to firm by up to $30/gt during the upcoming buy cycle, could potentially firm a bit more than that.
“I think [this announcement] proves that a lot can change in a week,” added a source from the Midwest. “Everything sounds bullish at this point.”
A final source said he also believes that the potential for higher scrap prices in November is now on the table.
“Order books and prices [for flat rolled steel] look phenomenal, and I think busheling has [the potential to firm by] $50-$80/gt over the next few trades,” he said. “It’s just a matter of how quickly we get there.”
The November buy cycle is expected to start by the end of the week.