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Jan. scrap market quiet as suppliers await bids

Keywords: Tags  scrap, ferrous scrap prices, Sean Davidson

NEW YORK — The first signs of where domestic ferrous scrap prices could settle in January are unlikely to emerge until late this week as mills have yet to trade for the month.

As of midday Wednesday, sources said some mills had made inquiries about scrap but none had offered any indications on price.

Most market participants said price trends will become clearer between Friday and Monday, although a handful of players said the market could see some low-volume trading as early as Thursday. On Wednesday, most continued to speculate that prices would be flat to up $20 per gross ton from December levels, as previously reported (, Dec. 21).

"Many (mills) would buy sideways, but offers are sparse and all up $15 to $20, so no buyers. I see half the nation sideways and the other half at plus $15," said one source, who speculated that mills in Chicago and the South will trade sideways, with Ohio, Pennsylvania and the Carolinas trending up.

Supply-side support for higher prices that some expected would emerge from tighter flows brought on by winter storms is likely to materialize in some regions but not all, according to sources.

"Dealers generally are looking for up, but simultaneously offering marginally more tonnage than usual. Weather will bear watching, but it’s more regional than nationwide. Chicago remains more or less snowfree, for instance, and no consumers seem overly hurried to buy," a second source said.

A Midwest source agreed. "There’s plenty of iron in (the) Chicago area and no more snow and cold weather. I now think plus $10 to $20, and am not sure that anything will happen until Friday."

Another Midwest source, however, said he was "fairly certain" that steel mills will have a "solid" buying program in January. "Winter storm activity will have some buyers on the edge of their seats, probably looking to buy fairly quickly," he said. "On the supply side, I suspect there are a lot of folks wanting to bring tons to market, so we should see fairly soon where the tipping point is in supply vs. demand."

A third Midwest source agreed that the flat-to-$20-up trend continues to look likely in the domestic scrap market. "General market talk is worst-case unchanged and best-case up $20. Bad weather recently and (price increases in) exports off both coasts recently have me guessing up $10," he said.

At least one supplier said he thinks some dealers are going to play hardball. "I would say up $20 to $30 in (some) parts of the country. Mills are receptive to 60-day orders right now, which is a tell-tale sign of an up market. They are downplaying the demand right now," he said.

Meanwhile, a source in the Mid-Atlantic region said there are rumors that one mill could step into the market Thursday at prices $10 per gross ton above December levels.

"Mills are quiet and only willing to indicate sideways to this point," another source in the region said. "But they are fully aware that with the container strike averted/postponed they will have to pay up money in January."

In the Ohio Valley region, sources indicated that mills could enter the market between Friday and Monday, with many speculating the market will rise between $15 and $20 per ton.

"I am getting calls from all mills trying to line up tons—no pricing, but making sure when the numbers come out they have what they need. (Export) docks have raised No. 1 heavy melt prices by $15, (a large New York dealer) is up $30 with his teaser numbers, bad weather, decent demand from Turkey—it’s all adding up to big numbers in January," one Ohio Valley supplier said.

In the South, one dealer said most mills in Texas will try to hold prices flat. "But there may be a small opening of a possible increase," he said, "and there have been some small trades at up a little, but these trades are for export."

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