August scrap market seen poised for sideways move

The purchasing is ongoing at this time. The mills that have come out with firm pricing are all basically sideways from levels of the last three months. The lone exception is turnings, which are in short supply due to the decrease industrial activity in the summer.

SMU spoke with a large scrap supplier in the Southeast who confirmed the mills in this region are all buying at the same levels as July.

“There are no surprises,” he said. He added that the scrap market has traded sideways for three consecutive months, which is very unusual for scrap. 

In the Ohio Valley and Western Pennsylvania, scrap prices were expected to follow the prevailing sideways moves of other districts There was some speculation busheling shipments could be disrupted, but this is not likely now.

Looking ahead, unless demand for hot-rolled coil (HRC) picks up appreciably, there seems little to move the scrap market upward until the seasonal activity that usually occurs later in Q4. 

Still, there could be weakening factors ahead. In the coming months, maintenance outages often are scheduled.  It has been announced Gerdau’s operations in Midlothian, Texas, will take a 21-day outage in September. This could affect scrap prices in this region.

SMU will report on other outages as they are announced.