Analysis
January 20, 2026
Will February bring a large price bump to ferrous scrap mart?
Written by Stephen Miller
Speculation has already begun on what February has in store for the US scrap market after it rose $20-30 per gross ton (gt) in January.
There were concerns shredded scrap would continue to be in short supply. Another concern was the supply of prime grades, which had only increased by ~$20/gt, as dealers were asking for parity with shredded prices.
The concerns about shredded scrap and other obsolescent grades centered around the severe winter weather in steel-producing regions. Scrap flows into dealers’ yards had slowed substantially with the early winter weather in November and December. After a brief break, earlier this month, another series of storms blew in with Arctic temperatures. The weather shows no signs of letting up. Given the situation concerning potential supply for February and with steelmakers running better, will the prices for scrap have to rise?
SMU contacted a mill source in the Central region for his view on February prices.
He said the weather is most likely going to have an effect on secondary grades. He noted deliveries of scrap into area shredders are down. As a result, he would expect prices to be up next month. However, he does not expect an increase more than $20/gt.
Another source in the Southeast told SMU, “The market is at worst sideways.”
Despite colder weather and reduced flows, there has not been much evidence at mid-month to call the market up, the source added. He went on to say there seems to be adequate busheling available.
SMU also spoke with a scrap industry veteran in the Midwest about what he sees for February.
He noted the weather has been extremely cold in this region, with temperatures diving below zero at night and rising to only single digits in the day. Flows of obsolescent scrap are greatly reduced. He said, “Maybe 60% of the regional shredders are even operating.”
The source predicts shredded scrap prices increasing by $30/gt in order to get material moving. If this happens, he thinks busheling prices will go along for the ride and could increase by $40/gt in order to seek parity with other grades.
Other factors that could influence the February market are rising prices for bulk export scrap. Also, a source in the Brazil informed SMU about a new pig iron cargo booked at $450 per metric ton (mt) CFR US Port, which is an increase of $5/mt since our last report.
