Ferrous Scrap

May market musings, steel scrap predictions, and the future of supply
Written by Stephen Miller
May 3, 2024
As we approach “buy week,” a term industry veterans use to refer to steel mill scrap buying time and an excuse to remain in the office, we have seen a variety of slants on the May market.
The consensus for ferrous scrap is sideways, maybe not a strong sideways this month.
There were the usual cancellations by a couple of mills to even further cloud market sentiment. After listening and reading about everyone’s opinion, it doesn’t seem like these will be much variation in pricing either way. In the past, when scrap prices ranged $100-150/gross ton (gt) a $20 move was considered big news. With prices elevated today into the $400-level, a $20 move is only a 5% change.
So, what is all the hoopla about?
There are predictions that export strengthening will affect certain markets; maybe coastal areas to a degree. Shredder feed will dry up if it falls from $200-180 per net ton. Really? There won’t be enough scrap to feed new EAF expansion. Not so sure about that, or the investments probably would not be made. After all, the capacity that came online over the seven to 10 years has never run out of scrap yet, despite their location in traditional scrap short areas.
In the US, we are fortunate to have the most efficient steel scrap processing industry in the world. It is advanced technologically and the industry reinvests in itself to stay at the most efficient level. The innovations over the years have allowed steelmakers to greenfield or convert to electric furnaces using primarily a ferrous scrap charge, sometimes with a dash of pig iron.
I know the steelmakers are claiming they have done this to turn “green,” but that wasn’t the goal when the electric conversion started in the middle of the last century. It was because it was a cheaper way to make steel, and the scrap industry was up to the task of providing the materials to make this method successful.
So, here’s to the EAF steelmakers for their foresight and investment. But they could not have pulled it off without a world-class scrap industry waiting in the wings. I would not fret too much if there is enough steel scrap to supply the new capacity. In my opinion, there will be. We should rather fret about where all that steel is going to be placed. I think the steel industry will succeed in this.

Stephen Miller
Read more from Stephen MillerLatest in Ferrous Scrap

IIMA meeting: Decarbonization to drive demand for scrap, DRI
In the Americas, the ongoing conversion to EAF melting is driving demand for prime grades of scrap and increased use of ore-based metallics

October scrap market still up for grabs
The ferrous scrap market is still searching for clues about the direction of the October market.

Recycler BL Duke launches steel turnings containment building in Illinois
Recycler BL Duke announced on Wednesday the launch of its new steel turnings containment building in Joliet, Ill.

Brazil, US buyers reach price compromise in pig iron market
A compromise has been reached in the pig iron market, sources told SMU. Recall we reported US buyers were bidding $390 per metric ton (mt) FOB or less while sellers were holding sideways at about $400/mt.

Opinions split on direction of October scrap market
There are divergent views among market participants about the direction of scrap prices as we head into October.