Early Alabama scrap cues point south for Oct.
PITTSBURGH Early scrap deals in Alabama are being done at a discount to September, but its too early to tell if this is where prices will settle.
One mill buyer has been successful in picking up busheling, No. 1 heavy melt and plate and structural steel scrap from domestic suppliers at down $5 to $10 per ton, and the mill also has booked a cargo of prime scrap from Sweden at an estimated price of $418.50 per tonne delivered to its facility.
No shredded scrap deals were transacted at a discount to September as the region is not experiencing the overhang of shred that is prevalent in northern cities, sources said.
A few early deals dont make a market, but October could be down a little, a mill supplier source said. A mill-owned broker has suggested this will be the last movement down and then it will be sideways to the end of the year.
Sources said that for the most part all but three mills in the region appear to be gearing up for a full buy in October. One mill is taking a one-week outage, a long products mill is running poorly due to a weak order book and a third mill has decent scrap inventory because it bought heavily in August and September.
Long product mills continue to lack business but sheet mills are running at a steady pace, according to several supplier sources. I think we are close to a bottom because (sheet) mills are coming back to us and wanting extra scrap, the shredder source said.
According to sources, inventories at scrapyards are decent but not robust, and if Alabama does throttle down in October it may be due to other regions. The mills know that other areas look as if they will be down $10 a ton and they will use the down across the country excuse as a playing card, said an exporter who buys in the area.
Some scrapyards said they would rather sit out the market than take another haircut. We have reached a point where we are willing to sit back for the rest of the year and sell up in January. Some guys held back in September for the same reason, another mill supplier source said.