US domestic scrap prices have not fully settled yet, but buyers throughout the US predict prices will “definitely settle at more favorable levels than we’ve seen in the past two months.”
“Things are up by about $20/gt ($20/mt) on the East coast and in the South,” a source said, adding that Detroit is also trading at up $20/gt.
Another source also confirmed “up $20/gt trading,” adding a strong belief that “there could be room for the market to come up a bit more before it’s all said and done.”
Scrap settling at up $20-$30/gt ($20-$30/mt) would be consistent with rumors that began to swirl last week, however, that outcome is still too soon to call. Scrap yards, however, say that profit margins during this month’s buy cycle will likely be null.
“None of us are getting rich off an up $20/gt ($20/mt) market,” one source said. “The up $20/gt ($20/mt) is basically a wash because that’s how much we’ve needed to raise the prices we pay to the collectors to get scrap into the yards.”
A third source agreed that prices “absolutely needed” to come up, adding that if not, “January is going to be a sad, sad situation.”
“Yard intake is low. Prices have to come up. When you factor in Thanksgiving and Christmas, cold weather, and the fact that it’s hunting season, you realistically only have 35 collection days between now and the end of the year,” he said. “If the [finished steel] market were to suddenly get legs come January, if we can’t get inflows up now, the situation in January will be bad.”
Settled scrap prices are expected to emerge before the end of the week.