US ferrous scrap tags to remain under pressure

Oct 26, 2011 | 02:19 PM | Sean Davidson

Tags  ferrous scrap, ferrous scrap prices, Schnitzer Steel Industries, Sims Metal Management, Blake Kelley, Metalico, Canaccord Genuity, Eric Prouty Eric Glover

NEW YORK — The downward trend in the U.S. ferrous scrap market appears set to carry into November, according to analysts at Canaccord Genuity Inc., estimating that No. 1 heavy melt export prices from the East Coast will fall $20 per ton for the month.

However, the market’s dip hasn’t been severe, the company’s analysts said in a report released Tuesday, predicting that No. 1 heavy melt prices will remain elevated by historical standards and should stabilize well above $300 per ton for November.

"While it’s still early, we wouldn’t be surprised to see No. 1 (heavy melt scrap) fall another $20 per ton or so based on our conversations with industry participants.... We continue to believe that ferrous scrap prices could rebound as colder weather inhibits scrap flows to yards," analysts Eric Prouty and Eric Glover wrote in the report. "We’d also note that any sudden increase in demand from overseas buyers—especially when scrap flows are diminished for whatever reason—can create immediate and significant upward pressure on prices."....