Analysis
March 31, 2026
Miller on Scrap: Will scrap tags fall in April?
Written by Stephen Miller
Winter is over now and the scrap landscape is looking a bit less challenging.
The US scrap market has made it through the winter season, struggling to supply its customers with the requisite amount of scrap they needed to take advantage of the increase in steel demand.
Of course, this is a seasonal change as the supply of obsolescent scrap increases with better weather. However, the situation on prime scrap is less certain.
One headwind for the scrap industry will be the increase in freight costs due to the war in the Persian Gulf.
Most trucks, ships, and barges run on diesel fuel. The rise in diesel will have an immediate impact on trucking rates, via fuel surcharges.
A trader in the Pittsburgh district characterized them as “crazy.”
The prime grades will experience the most immediate increase in pricing as freight from the factory floor to the processor or mill is not negotiable. But the delivered price of inbound obsolescent scrap can be negotiated.
Barging rates, according to a logistics executive, have gone up $3-5 per net ton this month on a spot basis.
The rates will go higher, even for those with barge contracts, once their fuel surcharges become effective. Ocean freights have also risen dramatically.
All this will affect the cost of producing and shipping ferrous scrap.
Despite this obstacle, US steelmakers sense a chance to lower prices on ferrous scrap. Several major scrap buyers have issued cancelations on a regional basis, thus far, for unshipped March orders, according to several sources in the Midwest. This usually means scrap prices will fall in the coming month.
A source in the Midwest told SMU he sees demand for scrap as strong with most mills in the Chicago area seemingly going to have normal to larger scrap programs in April.
“There doesn’t seem to be any overhang of material in the market,” he said.
He is not disputing the market could be down in April. Still, he does not see busheling as weak, but shredded is probably in better supply. He added that going forward beyond April, he does not see the steady decline of scrap prices the market has experienced the last several years.
There has been speculation the recent surge in export pricing could limit the flows from export yards on the US East Coast to mills in the interior.
SMU contacted an export executive who said, “Because deep-sea freight is very high, even though CFR prices are higher, FOB prices remain challenged.”
Therefore, it is likely US East Coast shredded scrap will continue to flow west with no significant fall-off. But it will be more costly as freight rates increase. The same is true on the West Coast. Scrap shipped by rail into mills in the Midwest or Texas will carry an increased surcharge.
A source in the Southeast told SMU he has not seen the cancelations the Midwest has reported.
He noted demand for all grades of scrap is very healthy in his area. As far as prices are concerned for April, he sees shredded and other cut grades as not down more than $10 per gross ton (gt) and busheling going sideways.
On busheling, he said, “There is just too much demand.”
He also noted pig iron is both scarce and expensive. This has been promoting the use of busheling to compensate.
Most market participants agree the market settlements won’t occur this week due to the observance of Passover and Easter.
