Scrap market sources throughout the US continue to report that while they feel that October prices should remain steady, they believe the market is likely to trend soft. Unexciting export prices coupled with mills’ pending maintenance outages are among the factors placing pressure on scrap prices.
“I don’t believe there is any hope of an upside,” a source said, adding that while the market could get a bump in the winter months, when scrap collection tends to slow, he doesn’t see much upside beyond that. “While we may be nearing the bottom, we might not be there yet. I am thinking soft sideways [for October] with the most risk on shred.”
A source in the South said that while most dealers he’s spoken to have said they think the market will trend down by another $20/gt across the board, that he believes the market should be steady.
A Midwest-based source agreed, adding that he thinks that whatever happens in October, that prices will start to move up again by November.
That sentiment was echoed by several others.
“There is virtually no scrap coming in so unless the mills are de-stocking for winter (which is unlikely) they will have to raise prices or run low on feedstock,” another source said.
On the other hand, despite lessened inflows into domestic scrap yards, numerous mills still have pending maintenance outages on their books. It’s also been rumored that David Joseph Company is already testing offers that are down “between $20-$40/gt” from September settled levels.
“I still think [the market] will [settle at soft sideways.] Too many consumers are still sitting on the sidelines with too big of a portion of their potential production,” a final source said. “That coupled with dealers not getting all they wanted sold in September seems to point to a lackluster market.”
The October buy cycle is expected to start in the early part of next week.