The November buy cycle is fast approaching, and while some in the US are reluctant to predict higher scrap prices for the upcoming months, others still feel that the market is likely to trend upward.
“Inflows are off anywhere between 20-40%, depending on who you're talking to,” a source said. “That’s definitely going to play into what happens in November.”
Another source agreed, citing mills’ low scrap inventories. “Mills aren't in a great inventory position and need to buy. However, that uptick in demand isn't necessarily a true meter of the market, because prices going up in November will be tied to this month's disruption in the supply chain.”
There is also concern that demand for finished steel remains weak. The reasons for this are numerous according to sources, including the trade war, weak business investment and the general economic slowdown. Combined with predictions that the US is on the tipping point of a recession, such factors are putting pressure on the market.
Yet despite negative factors, many suspect that this month’s disruption in scrap inflows are likely to lead to a $10-$20/gt ($10-$20/mt) price uptick during the November buy cycle. Others, however, are less optimistic.
“Everyone I’ve talked to are easy to say the market has bottomed,” a source said. “But they’re also slow to predict that the market will be up in November. With the upcoming holidays and mill outages, there aren’t a lot of melt days left in the year.”