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    April 3, 2024

    Miller on scrap: Market seeks direction ahead of April buy

    Written by Stephen Miller

    On the eve of the April ferrous scrap buy, there is no firm consensus on the market’s direction.

    The safe predictions are “soft” sideways to “strong” sideways. That may mean down $10 per gross ton (gt) to up $10/gt.

    RMU has heard two mills in the Great Lakes region have canceled March orders, presumably in hopes of buying down in April. This is not usually a good sign for a market to hold sideways.

    But their mill-owned competitors have approached dealers for sideways prices and, in some districts, even up money. This is a bit unusual, and one can’t be sure of the rationale for the divergent trends. Maybe soft-to-strong sideways was right all along.

    RMU spoke to a trader in the Ohio Valley who said that several mills in the US have outages planned for April. He added that “another two mills will not have full programs.” This is a definite headwind for scrap prices.

    There are several tailwinds, however. As I and my colleagues have mentioned in previous columns, the export markets have firmed significantly. Pig iron prices have also climbed. The likely impact of an April price decline on shredder feed is thought to be negative. It’s also not clear whether some mills have sufficient inventories of scrap.

    Some players in the scrap industry think that mills with cutbacks or outages might view their April needs as minimal, thereby allowing them to take their prices down. But others think that mills might need to buy their regular complement of material. That second group notes this: Mills are loathe to take chances at down prices that sellers might resist – especially with what happened to the January buy and to a lesser extent in February too.

    At this point, we are not sure of the market’s ultimate direction. But it will become clearer in the next few days. The trade is reporting the scrap buying from the mills will kick off yet this week as opposed to next week. RMU will report on this as soon as events occur.

    Editor’s note: This column appeared first in Recycled Metals Update (RMU), SMU’s new sister publication. RMU is devoted entirely to the ferrous and nonferrous scrap markets. If you’d like to learn more, visit RMU’s homepage and take out a free, 30-day trial.

    Stephen Miller

    Stephen Miller started his career in the scrap metal industry in 1978 at Luria Brothers in Cleveland. Over the last 40-plus years, he has worked in all capacities in the trading business. He has had positions in both domestic and international scrap trading. In addition to scrap, Miller was at the forefront of the pig iron trade and established a pig iron distribution company under the name of Ferrosource, Inc. Most recently, Miller has concentrated on the scrap export market and regularly does consulting for several companies in the industry.

    Read more from Stephen Miller

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