Ferrous Scrap Prices Up in November

Ferrous scrap prices traded $15-25/GT higher in November, with some variation by region, report Steel Market Update sources. Scrap prices were widely expected to rise in November due to slowing scrap flows, mills returning from seasonal outages, rising import demand and the onset of winter weather in some parts of the country.

“Mills’ appetite for scrap certainly seemed to grow as the trading period went on,” commented one dealer. “The Southeast was the strongest region, while the Midwest—specifically the Ohio Valley and Chicago districts—was the weakest.”

A big buy at +$20/GT by one major player, plus the rising export market (latest sales to Turkey are $260/MT CIF) were the main drivers of the market, said one source. “Most dealers resisted early bids of less than +$20, and eventually got their price.”  

The Detroit mills announced scrap price increases of $20/GT across the board, said CRU North America Analyst Ryan McKinley. “Mill buys are generally smaller than average this month, but scrap flows have slowed enough to support prices. The mills will likely be happy to have more leverage to support another HRC price increase announcement,” he added.

Another dealer in the Northeast said the northern mills entered the market up $20/GT, but now he is hearing quotes of up $30-35/GT into the southern mills. “In my opinion, these scrap price increases have less to do with actual supply and demand and more to do with justifying the finished steel price increases.”

Said another dealer: “My sense is that the mills see demand for finished steel as having bottomed and getting better, and there isn’t a lot of scrap out there with these low prices. Expect scrap to stay tight into the end of the year and prices to rise further. I don’t expect a price explosion, but we should continue to see improvement.”  

Demand should marginally increase through January. Combined with the usual seasonal factors, this should keep domestic scrap prices firm with a probable increase in December/January, predicted another. 

“Export prices have increased month over month, and we are entering a much colder time of year, which will further affect flows. I think we will generally see a seasonal uptick in prices over the next 60 days or so,” added McKinley.

One source puts current scrap prices at the following: Shred, $235/GT; Bush/Bundles, $250-265/GT; HMS, $205/GT; and Plate, $230/GT.