What is the primary focus, if not on closing deals?

As we approach the end of September, there is a sense of confusion in the market that’s hard to shake. By now, we should have more clarity, but it feels like we’re still in the dark. Historically, the summer months are slow for the metals industry, from the family vacations to auto factory shutdowns, and European countries that basically shut down for a whole month or more. It’s usually like a long nap. And then September hits with a bang. Contracts flood in, and we’re thrust into the fast-paced conference season. But this year feels different—there’s an eerie calm. No rush, no frenzy to outbid on contracts, and in fact, many bulk deals were reportedly completed back in August. So, what’s really going on? What does the forecast look like for Q4 and even 2025?

This week, the landscape of the recycled metals industry is murky, and frankly, it’s unsettling. ADI’s much anticipated entry into the market is creating waves, but it’s Alcoa’s exit from its 25.1% stake in the aluminum joint venture with Saudi Arabia’s Ma’aden that’s likely to have the bigger impact. With Alcoa stepping back, the already tight aluminum supply will face even more pressure. Manufacturers like Novelis, Hydro, and others will be under immense strain to source more recycled metal, especially as automotive production stoppages continue to disrupt the upstream supply chain. The real question is: how will they manage their sourcing strategies in the next three to six months? The answer will be crucial.

On the ferrous side, Steel Dynamics (SDI) recently provided their Q3 outlook, projecting stable demand and moderate growth, which adds a note of cautious optimism to the mix. Export demand remains steady, and scrap pricing has held firm for now. However, there’s chatter about the possibility of prices rising by the winter, particularly if demand rebounds as expected. If that happens, we could be looking at a major shift in commodity pricing norms.

Now, there’s been talk that UBC pricing might hit 80% by year’s end, which doesn’t quite add up, in my view. At 80%, it would wipe out any margins for buyers, making it impossible to purchase. It feels more like speculative noise than reality.

The reality is that the market is sending mixed signals and we’re heading into Q4 without the usual urgency, which makes one wonder if we’re in for a reset of sorts. The next few weeks will be pivotal, whether the noise about UBC pricing is just that or if we see some unexcepted shifts in both ferrous and non-ferrous markets that throw off the traditional patterns we’re used to navigating through.