Ferrous scrap prices in U.S. markets are likely to trend
sideways or record a minor uptick in December, according to
Most market players
surveyed by AMM said scrap prices in the Midwest and
other regions are likely to either stay unchanged or increase
up to $10 per gross ton from November.
they speculated, would come around the turn of the year.
Many suggested that
mills likely bought additional scrap volumes in November to
cover some ground for December, putting a damper on any efforts
to push for big increases.
Scrap dealers said
they would hold on to scrap volumes in the hope of a big
increase in January or February.
Less than a quarter of
the market sources contacted by AMM felt prices could
increase $10 to $20 per ton, due to possibly stronger demand
from some mills, tighter scrap flows and dealer resistance to
low prices. For the most part, though, market participants said
December is poised to be a month of marginal movement.
"I would say the
weakness in East Coast exports will help keep the scrap market
in check for December. (There also is) some weakness in recent
sheet hikes. I believe there are already some rumblings of
price increases not sticking, so I think that has kept a lid on
enthusiasm for December," a buyer for one producer said.
A majority of the
market sources said scrap price increases in November failed to
spark any meaningful increase in flows into dealer yards, and
they were divided on whether scrap dealers and brokers will be
able to fulfill all the orders they booked for November
sources conceded this would do little to dramatically lift
prices in December, with mills buying for a shorter production
month and dealers holding back for January and February.
"I see no reason for a
price increase as it wont pull any more scrap, but it
sure looks like it will be moderately stronger," one dealer
A second dealer said
decreased supply will match the perceived decreased demand. "I
also think the mills tried to buy through the first week of
December. That will only give them the need to buy for two to
three weeks in December with those outages," he said.
A few others, however,
"I think any
Midwest-area mill faced with winter not far off should have
concerns about scrap supply unless they have demolition jobs
going on in their backyard," said one dealer, citing poor scrap
flows this month.
"Mills are not out of
the woods yet. They are motivated to keep the threat of rising
raw material costs higher as a weapon to stabilize their price
increases and steel margins, which are huge," a trader
Should December indeed
trade at sideways to up $10 per ton, many suggested that it
would set the stage for a $20 to $30 increase in January or
"As we know, December
starts to be January around the 15th. If the dealer sniffs
another pop they will hold and we could break out in January at
up $20. Steel has too much momentum right now, price increases
are sticking ... a flat market sucks the (life) out of the
steel market in my opinion," the trader said.
In Texas, most sources
reported extremely poor obsolete scrap collection but said
that, like their Midwest counterparts, they expect to receive
meaningful increases over the next two months and not
necessarily all in December.