Ferrous scrap market outlook brightens

Midwest

As an example, ArcelorMittal’s closure of their wire mill in Hamilton, Ontario, has resulted in increased orders being placed for US-based producers of these products.

One source we spoke with was confident this would increase scrap usage at these mills. He also said he’s noticed improved industrial scrap generation at several stamping plants, which indicates stable business conditions.

He is calling July “strong sideways.”

Ohio and Detroit

It may be too early for any of these positive factors to result in any upward movement for scrap prices in July.

There is still quite a bit of scrap, mainly prime scrap, available from the Detroit and Ontario districts, since some buyers in Ohio and Indiana did not have full scrap programs this month.

But with improved programs next month, this scrap should be able to find a home. 

Another source in the Northern Ohio area said mills are not going to want to raise prices for July since there seems to be no real supply problem.

This source said, “The market is going sideways, no matter what.”

He added that after July the market should trade on the reality of supply and demand.

Southeast

A source in the Southeast also agreed the July market will trade sideways with no decrease in demand.

The larger consumers are running very well. In addition to this stability in scrap demand, the southern market will have two new consumers, namely Hybar in Arkansas and AM/NS Calvert in Alabama. 

So the overall consensus across several regions is for a level scrap market in July with improved sentiment in the months thereafter.

We will have to see if this new and improved sentiment can disrupt the downward pattern in which the market has traded for the last two years.