Ferrous Scrap Prices Down $20

Ferrous scrap prices for shipment to the domestic steel mills around the country have been dropping since the negotiations began at the beginning of the month. For most geographical areas scrap prices have declined $15-$20 per gross ton compared to where they were at this point in time last month.

Our Chicago area sources are advising us that ferrous scrap prices have declined approximately $20 per gross ton across the board.

There are a couple of maintenance outages being taken at the integrated steel mills during the month of October. US Steel Granite City has a two-week planned maintenance outage on one of its blast furnaces. MetalPrices.com reported that USS Gary Works is buying less scrap than usual this month. ArcelorMittal has a planned two week outage on one of its furnaces in Indiana and has cut back on its buying as it attempts to reduce inventory by the end of the year.

NLMK Indiana is aggressively buying scrap as they prepare for a planned maintenance outage on their equipment in November.

Dealers are concerned about the loss of Gallatin, Severstal Dearborn and Severstal Columbus as consolidation is shrinking the number of bidders on scrap.

On the east coast prices fell by as much as $23 per ton on some products and $20 per ton on Busheling. On Tuesday of this week Mike Marley of MetalPrices.com reported, “Turkish steel mills, U.S. exporters’ main overseas buyers, have not bought any scrap from the U.S. in the past week.  One trader said the U.S. exporters are being undersold by their European competitors.  The stronger U.S. dollar has made U.S. scrap more expensive than what is available from Europe.”

When the Turkish mills aren’t buying the tendency is for the excess scrap to get moved into the Mid-Atlantic and Ohio Valley pushing prices down in its path.

Mr. Marley in his Tuesday report said, “Weak export and mill demand spurred some to try selling some of their scrap in markets to the west and south, but most found that the prices were dropping in those regions by the same $20 per ton margin.  Still, said one broker, the choice between accepting a price that matched what could be obtained locally was preferable to letting scrap pile up when facing an uncertain and possibly weaker market in next month.”

SMU scrap sources are telling us that the market is “ugly” and that ugliness could very well carry into November sales as well.

Lower scrap prices could trigger lower steel offers out of some of the steel mills in the coming weeks.