Export prices vs. domestic scrap market: Who's in control?

As we await the formation of November’s domestic ferrous scrap market, all the recent action is in the export market. However, it is debatable whether events in this arena are influencing our US market other than psychologically. This opinion has been expressed by several sources I have approached.

One source has said export market news has been used to justify the monthly direction of the US and Canadian domestic markets by both seller and buyer. He explained when export prices rise, the scrap trade expects increases in domestic prices. On the other hand, when they fall, buyers use this to justify their lower buying prices. Sometimes, export prices from the US East Coast (USEC) go up and down within the same month. But this does not stop the speculation on both sides of the aisle.