Final Thoughts

Final Thoughts
Written by Stephen Miller
February 25, 2025
As February comes to a close this week, scrap markets are poised for another – and perhaps more extreme – move upward in March.
March is usually a month when scrap prices relent as winter’s impediments subside. That’s not the case this year. And this time, the driver of prices will be increased demand from mills along with restricted flows over the last two months.
It will take warmer seasonal weather and higher prices for scrap supply to catch up with demand. The specter of across-the-board tariffs on all goods from Canada and Mexico has also reappeared after a one-month reprieve. If these tariffs apply to ferrous scrap, it will amplify the bullish forces already in place.
Mills are raising their sheet prices as demand has resurfaced (at least for the time being). This has made higher scrap prices more tolerable. Meanwhile, supply of shredded scrap is lagging demand.
Shredder feed is under immense pressure as shredders try to fill older, unshipped orders. Many players are forecasting shredded to rise $40-50 per gross ton (gt) in some districts. Prime grades are faring no better with industrial generation down as hot-rolled coil production goes up.
There was similar chatter at the ReMA Consumers’ Night in St. Louis last week. (It was well attended despite the Arctic weather.) The event is the largest gathering of recycled metals industry professionals with the exception of the ReMA annual convention.
Attendees told SMU a great many scrap buyers and traders were attempting to line up scrap shipments to their respective mills. That only added to the speculation around how high prices might go in March.
“One thing is for certain … this market is up, ” a steel mill source told SMU. He added that steel production has increased. But scrap supply was not meeting demand. He thinks scrap could settle up roughly $30-40/gt next month. But after March, he added, some of the overpriced deals in the market could be corrected – weather permitting.
SMU Ferrous Scrap Survey
SMU sent out its scrap survey yesterday. We thank those of you who have participated. And if you don’t participate but would like to, please reach out to my colleague David Schollaert at david@steelmarketupdate.com to learn more.
We will report the results of our Ferrous Scrap Survey to our premium subscribers next week. In the meantime, you can check out all Steel Market Survey results here. And you can see the results of our inaugural scrap survey, which we released earlier this month, here.
If you’re an executive subscriber, this kind of information is worth upgrading to premium for. Please contact SMU senior account representative Luis Corona (luis.corona@crugroup.com) to learn more.

Stephen Miller
Read more from Stephen MillerLatest in Final Thoughts

Final Thoughts
Tariff-related noise aside, there is one basic factor keeping buyers on the sidelines. Despite recent declines, HR prices remain at historically high levels. And there is no obvious support to keep them there.

Final Thoughts
United Airlines raised eyebrows earlier this month when it provided two forecasts for 2025 – one assuming a relatively stable economy and another assuming a recession. The reason? Uncertainty around the impact of President Trump’s policy shocks on the broader economy. And it sometimes feels like we’re seeing a battle between those two narratives (stable vs recession) play out within in the pages of this newsletter.

Final Thoughts
Despite some scary headlines lately (especially about Trump potentially firing Fed Chair Jerome Powell) this is not October 2008 (financial crisis) or March 2020 (onset of the pandemic). But it sure seems like we’ve taken a relatively strong economy and poured a thick sauce of uncertainty over it.

Final Thoughts
I put some of our survey data through ChatGpt, with interesting results.

Final Thoughts
Nearly 50% of respondents to our latest survey thought hot-rolled coil prices have already peaked. And where will those prices be two months from now? Responses were decidedly split on that question.