Market
October 29, 2024
Peterson: Ferrous scrap market set for strong November
Written by Ray Peterson
Since my last article, it appears that I was proven wrong in my suggestion that the September ferrous scrap market would be down. I believe that it was pretty much sideways but if you consider the price of shredded scrap, I can claim some small measure of accuracy.
Of course, there are always the quiet deals that happen virtually every month and the very quiet deals that only a few people know about. I can assure you that shredders in the Pennsylvania/Ohio area were paying significantly up prices for shredder feed despite the supposed down price for shred.
I believe we are in agreement that the October ferrous scrap market was up $20/gt across the board if you ignore the Detroit and Chicago markets. So, what does November look like at the moment? I am hearing sideways, a strong sideways and up $20/gt. What I am not hearing is any downward pressure. If one assumes that Chicago and Detroit are going to have to up their prices, that certainly will not dampen any enthusiasm for upward movement in November.
On the negative side, I am hearing that the export market has quickly grown quiet so there is that emotional factor to calculate. Personally, I believe that any export movement is mostly emotional since folks are not going to quickly sell their export earmarked scrap domestically. Trucking is too expensive to move material from the East Coast to Pennsylvania, Ohio and Michigan, and I have a supplier in Eastern Pennsylvania that has been waiting for a railcar to be spotted for most of October.
I have previously dared to mention politics in my articles, and I must say that at this moment in time I am sensing that folks are holding their breath on so many levels to see how the election is going to go. We can all debate the social issues in this campaign, but I believe it is clear in the minds of most people which candidate is going to be better for business. Depending on the November 5th (or a week or two later) results, there could be a fairly dramatic emotional reaction to the winner, no matter who it may be.
Based on all of the above, I am going to go with the market being up in the $20/gt range for November. By the way, has anyone noticed that there is hardly ever a $5 or $10/gt movement?
Editor’s note: The views, thoughts, and opinions expressed in the content above belong solely to the author and do not necessarily reflect the opinions and beliefs of Recycled Metals Update or its parent company, CRU Group.
