Multiple sources have indicated that they believe November scrap prices are poised to stay sideways. One source said that the number of mills coming back from scheduled maintenance coupled with the fast-approaching winter months has him thinking that the markets are fairly stable.
“Could they move a few dollars either way? Possibly,” he said. “But my bet would be sideways to try and get a little scrap on the ground before winter as mill inventories at least in the Midwest are quite low.”
Others largely agreed, with a second source adding that while based on today’s snapshot of the market, he could see scrap trending sideways in November. On the other hand, if the UAW strike is settled by the start of the next buy cycle, he believes that prices are likely to firm.
The belief that both scrap and finished steel prices will rise at the conclusion of the UAW strike, which is now in its 33rd day, is widespread. Flats market sources say they believe that mills will move to raise sheet prices as soon as the strike concludes, while sources in other segments have told SteelOrbis that if HRC prices start to climb, price increases for other products “won’t be far behind.”
A third source said that in the absence of export prices off the East coast starting to firm, which at current, appears to be unlikely, that he thinks the market is shaping up to hold sideways in November.
“I think plenty of scrap will still be needed, but the current market prices can support it,” he said. “With export unlikely to move up at all, I don’t see up pricing in November, and steel order books are healthy enough to prevent this thing from going down.”
Looking to the Midwest/Ohio Valley region, one source in that region pointed out that with November being a short month due to the Thanksgiving holiday, and December being even shorter with the year-end holiday season, he doesn’t expect to see anything bold. Another source in that region said he’s starting to see tightness in prime grade scrap, adding that dealers in his area who have primes, are holding that inventory in anticipation of higher prices. “I don’t have a good [sense] of what will happen [with pricing on secondary grades] but I’m definitely seeing a push upward on prime.”
For now, the price expectation for November is largely sideways. Additional information about the state of the market, and whether still-firming US HRC prices will impact mills’ price expectations during the next buy cycle, is expected to come within the next week.