Scrap Prices North America

November Scrap Tags Seen Mostly Sideways, Sources Say

Written by Stephen Miller

As the ferrous scrap market in the US enters the home stretch for 2023, it faces an array of issues and uncertainties. This has made predictions of its potential movement a point of debate between buyers and sellers.

The market has been drifting downwards in price for the last several months and this has reduced flows of obsolete grades. To aggravate this situation, the market is entering seasonal slowing as winter approaches. Prime grades are less plentiful now that the United Auto Workers (UAW) strike has had, or will have in the neat future, an effect on the amount of automotive material generated by the “Big Three” automakers.

So where is the market heading for November and the rest of the year?

The consensus view is the market has finally bottomed after October’s decline for shredded and HMS. Most dealers are saying sideways pricing will be the most likely outcome.

Mark Fritts, owner and CEO of Fortify Trading in Chicago, said the market is trending sideways despite the UAW strike. If this happens, the December market will be stronger.

That is, if the mills are not successful in lowering the November prices, that means scrap is getting scarce and dealers will want upward pricing. Or, they’ll wait to sell in January.

Fritts pointed out the market for the balance of the year does face the obstacles such as the vacation downtimes steelmakers will take for the holiday season.

He also mentioned mill-owned scrap brokers are warning dealers the market will trade downward in November. This type of talk from these traders is not unusual.

Another Chicago area scrap executive was more skeptical about a sideways move. He noted the Turkish export market, which had been firm for the last two months, has moved downward recently. This, coupled with the Ukraine and Israel-Gaza conflicts and the paralyzed House of Representatives, make a cloudy case for sideways, much less, upward pricing.

“Not sure why scrap would go up from here,” he added.

Another source in the Northeast noted the drop in export prices for Turkey. The HMS 80/20 prices for delivery to Turkey from the US and Northern Europe have declined $20 per metric ton (MT) over the last two weeks.

In fact, on Friday, it was reported a USEC cargo to Turkey was sold at $355/MT CFR Turkey. Another Northern Europe cargo was then sold to Turkey at $348/MT. These price declines are most likely due to the trouble of shipping to the Middle East where Turkish mills supply a great deal of the steel.

Back in the US, the outages at various steel mills are largely over and demand looks healthy for next month. If the steel mill buyers try to lower tags on obsolescent grades, they could encounter dealer resistance as they did last month in the Southeastern districts.

It was reported many dealers in this region put their foot down and decided not to sell at down prices. Prices largely traded sideways thereafter. If they did that then, they will insist again on no further drops for November.

We still have two weeks before the November market settles, so the way domestic issues and the geopolitical events have been unfolding, literally anything can happen.

Stephen Miller

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