Activity within the US domestic scrap market has been mostly quiet thus far, although most sources still believe the market is likely to settle by the end of the week. And while predictions as to where settled prices may land aren’t in total alignment, the one thing that people agree on is that “prices most certainly aren’t going up."
“I think that primes [will settle] at down $30/gt and that shred will be down $20/gt,” said a source in the Southeast, adding that he believes “this will absolutely lead to some shredders [putting their prime grade scrap] in the shredder. I think cut grades will trade [at] sideways for sure.”
Another source said he’s heard that a well-known Midwest mill will announce they’re coming out at “sideways on cut grades and down $30/gt on shredded and busheling,” whereas a third source said he knows of another mill that’s “trying to buy cut grades at down $10/gt.”
Whether that mill will be successful at buying cuts at down $10/gt has yet to be determined.
Sources continue to underscore that they feel that market prices are “lower than they should be,” adding that they feel that regardless as to what happens in October, that prices will need to improve in November and December due to the “seasonal tightening of supply that tends to happen toward the end of the year.”
“What people need to keep in mind is that there are still a lot of mills that have outages this month, with export [prices] not being great, there’s still more supply than there is demand,” a sources in the Midwest noted, adding that there were quite a few scrap dealers that didn’t sell as many tons to mills, in September, as they hoped.
“Demand will get better when the mills that have outages come back online,” he continued. “When you combine this with the fact that less scrap comes into the yards when the weather starts to get colder, I think that’s the recipe that’s going to lead to higher prices heading into the end of the year.”