Opinions split on direction of October scrap market

A trader source in the Ohio/W. Pennsylvania districts is thinking sideways as his suppliers are reporting slower scale traffic and reduced industrial generation. However, he laments that whatever the mill-owned brokers decide the price will be, either sideways or down, it will meet scant resistance.  

A mill source in the Great Lakes region has a more bearish prediction.

He believes the overall market will be down significantly. He noted the decline in export scrap will carry over to the domestic market. The source also noted most steelmakers are sitting on high scrap inventories and some larger HRC mills feel they missed an opportunity to push prices down more in September.

This source is of the opinion busheling will be the hardest hit with a narrowing of the spread vs. shredded scrap. He also noted mill outages in late September and October will aggravate potential weakness.  

SMU contacted a scrap executive in the Southern region about his slant on the October market.

He said prices could be down but only marginally. He disagreed with our Great Lakes source about inventory levels at major mills, at least in the South.

He noted that steelmakers on the Lower Mississippi River are short shredded and HMS. In addition, new entrants like AM Calvert and Hybar are seeking tonnages. In general, most dealers in the area do not have extra material on hand.

With these conflicting views, it may be too early to firmly establish a prediction for October.