October Scrap Expected to be Sideways to Down $20/Ton

Steel Market Update sources expect ferrous scrap prices to be sideways to down in October, potentially the fifth consecutive monthly decline since the record highs seen earlier this year. Obsolete grades are anticipated to fall as much as $20 per gross ton or more, while prime scrap is expected to remain flat or slightly decline.

One scrap expert attributed the expected price declines to lackluster demand across the globe, remarking that obsolete grades should drop more than primes. Multiple other sources also expressed concerns on weak demand.

Multiple sources expect scrap prices to pick up in the coming months, mentioning that scrap prices seasonally strengthen as fall comes around. One Northeast scrap executive explained, “If we look back over the last 10–12 years, October has often proved to be a down month and a bottom for scrap prices before they tick higher heading into the winter months. I think this year will be that kind of story, too.”

One executive commented that shrinking inventories could soon curb the downward trend in prices. “Supply of scrap here and overseas remains tight from my view. Not much excess inventory. So I imagine that overseas buyers will end up buying from US exports before too long.”

Looking at the global scrap market, two sources mentioned export prices ticked up in the past week, despite remaining weak overall. One expert remarked, “[The] lack of scrap in Europe is driving things despite the strengthening of the USD, which usually lessens prices.”

We will report on the final scrap figures for next month around the second week of October.

Recall our scrap price indices in September were: Busheling at $380–430 per gross ton, averaging $405. Shred at $395–415 per gross ton, averaging $405. HMS at $300–330 per gross ton, averaging $315.

Don’t forget: In addition to our finished steel prices, you can chart scrap prices as far back as 2007 using SMU’s interactive pricing tool.

By Brett Linton, Brett@SteelMarketUpdate.com