November ferrous scrap tags land a soft sideways

SMU’s November scrap pricing stands at:

• Busheling at $390-420 per gross ton (gt), averaging $405/gt, even with October.
• Shredded at $375-400/gt, averaging $387.50/gt, down $2.50 from October.
• HMS at $315-340/gt, averaging $327.50/gt, down $12.50 from October.

Recall that SMU reported that scrap prices inched up outside of Chicago and Detroit last month. This led many to believe the market had hit bottom.

A second source commented on the disparity, “Month-over-month price moves are explained by export pricing.” He noted tags dropped about $25/gt for 80/20 and shred to Turkey over the course of October.

Also, he said that US demand isn’t picking up strongly yet.

“I normally would say that’s just a seasonal matter, but I am concerned that it’s deeper than that,” he added.

He said Chinese billet is penetrating the Turkish market, there’s plenty of scrap available from Europe, and a large US scrap consumer is under orders to reduce scrap inventory by year’s end. 

Commenting on the November trade, a third source remarked that any reduction in price would have been met with a decrease in tons offered for sale by scrap suppliers. 

“Simply put,” he added, “Mills did not want to risk being short going into Dec./Jan. and paid sideways to maintain inbound pipeline flows.”

Outlook

Looking to next month, the second source said, “Most dealers I speak with call December sideways.”

The third source agreed, saying, “Expectations for December are decidedly sideways with the major market factors stable through the end of the year.”