As with last week, scrap market sources throughout the US say they believe there is “no downside” heading into December.
“[Pinpointing the market for December] is still a bit hard at this point, and things are still a little bit hazy, but everything looks favorable,” a source said. “I think we could see up $20-$30/gt in the Southeast on cuts and shred, and we could see up $10/gt on primes. I also think we could see some upward pricing in Chicago, the Ohio Valley, and in the Northeast.”
And while other sources have also talked about a possible up $20-$30/gt on secondary grades, and sideways to up $10/gt on primes, others say they “haven’t quite bought into the idea that the market will be up $30/gt next month.”
“I think most people are comfortable that the market will stay the same or maybe increase over the course of the next 60-90 days,” a Northeast-based source said. “I don’t see it going down in January unless the market gets flooded with massive tonnages.”
Additionally, several other sources speculated that some yards, and some sellers, may hold tonnages back in December, due to potential tax ramifications of selling before January. “I think some people might sit next month out, but if the market goes up $20-$30/gt, we’ll take it.”
Scrap inflows have also been described as decent.
“I know that in parts of the Ohio Valley, the weather has still been favorable. I haven’t heard anything about the yards raising their prices to try to bump up inflows, and it seems like things are still steady. From the people I’ve talked to, it sounds like people are satisfied with how things are for now.”
Another source agreed, adding that while some reports from earlier in the week indicated that mills in Chicago and Detroit were in critical need of scrap, which some believed was indicative of a scrap shortage, SteelOrbis market sources largely disagree with that reporting.
“There is by no means a scrap frenzy,” another source added. “According to the people I’ve talked to, do mills in those regions need to buy more scrap? Yes. Do they need it? Yes. Are they scrambling and underwater because they can’t find it? No.”
The December scrap trade is expected to start in approximately 14 days. Additional clarity on the market is expected to come next week.