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
(amm.com, 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 its 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.
"Theres 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.
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
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
"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 tonsno 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 Turkeyits 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."