Market
May 7, 2024
Peterson: Waiting on May prices
Written by Ray Peterson
Well folks, here we are again on the 7th of the month and we still don’t have a market. Wasn’t it great last month when we knew what prices were doing in less than four days?
Of course, there are rumblings. Apparently the usual suspects are making their rounds, telling dealers that the market is off, probably $20/gt on cut grades, and even on prime in some cases, although last week the consensus was that prime scrap would be sideways and possibly up $20/gt in some markets.
It is clear that steel mill order books are not what they were hoping for in May, and they probably are not going to strengthen in June, either. So it would be difficult to make a case for a sideways market.
This said, I have been hearing from a number of sources that people who own shredders have been forced to pay more for shredder feed than one would expect based on the price of shredded scrap at the mills.
Since shredded scrap is the favorite feed stock of the electric arc furnace, there is a question as to how low the price of shredded scrap can go before it cuts off the necessary raw material.
Although I do not trade in non-ferrous grades, I am hearing that Zorba is not the source of income for the shredders that it once was.
Putting all of this information together, one would have to guess that the May scrap market is going to be what I would call a “weak sideways.” What does that mean? Some dealers will hold out for sideways and others will sell some scrap at down $10/gt or $20/gt and see what June brings. I am still being told that scrap is not flowing across the scales and prompt industrial scrap production has fallen off a bit as well.
Stay tuned for further exciting developments.
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.
