Market
August 12, 2024
Steel's August stumble
Written by Ray Peterson
It looks like the August market has quietly gone sideways with little interest shown by either the mills or their scrap suppliers. The funny thing seems to be the sales that were made in mid-July that were up $20/gt. There is little doubt about the price, the buyer, or the commodity, so what happened in the last couple of weeks? I am going to guess that a certain steel company wanted to shore up their HRC price on the basis of the price that they paid for scrap and somehow it just went off the rails once it was time for the August market to develop.
The bottom line seems to be that the steel industry’s demand for scrap is pretty low these days. This, coupled with a drop in export prices, quickly took whatever little heat there was right out of the market. The fact that everyone to whom I have talked says that the flow of scrap into their yards or out of their industrial accounts is down is irrelevant in the face of falling demand. If we could just find a second use for ferrous scrap, maybe we could get prices moving upward.
So, what can we expect for September? Since August is almost half over, I don’t think it is too early to start thinking about how the third quarter pricing is going to end. My guess right now is that pricing will be down. I realize that we live in a 30-day-market world, but if you look at the big picture you might note that the economy is not doing very well. The word “recession” is being bandied about on numerous newscasts and the Fed is thinking about emergency interest rate reductions while we are headed into a very contentious election season. Manufacturing jobs are down, and manufacturing seems to be where most of the steel is used. I don’t tend to get political, but I am going to guess that the economy isn’t going to improve much until we see the direction that the nation is headed for the next four years. Historically, scrap prices usually rise in the 4th Quarter so perhaps there is some hope before the end of the year.
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.
