Buying prices at automotive shredders lack clear direction, with signals from steel mills suggesting that they either need ferrous scrap or are on a scouting mission to determine how much material will be available in September.
One Southeast shredder source fears that all of the gains enjoyed in August will be handed back in September, noting that mills have been making inquiries and have found there to be an overhang of scrap.
“Mills think they can pull this market down. Scrap flows are pretty good. Flows have rebounded from a slow start. When people noticed slowness in domestic and international markets, they got skittish and started selling because cash flow is needed,” one broker said.
Mills also tested the market mid-month to see what scrap was available and are pretty confident they can meet their needs with ease in September, the Southeast shredder source said.
On the flip side, a second shredder source acknowledged that mills were making mid-month inquiries but attributed this to them not getting scrap fast enough.
“I am perplexed that people are talking anything but sideways [prices for September] because mills are asking me to expedite orders because they are not getting their scrap. I am struggling to fill all my orders and some suppliers are holding back on me because they don't like the price,” the second shredder source said.
Fastmarkets’ assessments for steel scrap shredder feed were mixed, with the Ohio Valley unchanged, the Midwest down modestly and the Southeast slightly higher.
Fastmarkets’ assessments for steel scrap shredder feed, fob Ohio Valley, held at $111.70 per gross ton on Monday August 26, while shredder feed, fob Midwest, fell by $2.63 to $113.25 per ton and shredder feed, fob Southeast, increased by $1.02 to $119.72 per ton.