Analysis
April 16, 2026
May scrap looks bright amid tight market conditions
Written by Stephen Miller
As the Recycled Materials Association (ReMA) wraps up its national convention in Las Vegas, the ferrous trade is feeling good about May. This is not uncommon after a convention where participants meet with colleagues and talk up the market. However, this year it may be more than wishful talk.
There are several factors buttressing the ferrous scrap market against it seasonal fall in the spring months. We all know about the Iran War and the rise in fuel costs. Other factors include strong steelmaking activity, rising steel prices, lighter inbound scrap flows, and firm export markets. In addition, prices for scrap substitutes like pig iron and hot-briquetted iron (HBI) are also elevated, and supplies are short.
Heard in the market
SMU heard from a Pennsylvania-based trader who said his smaller and mid-sized suppliers think the scrap market will be no worse than sideways for May. He said this group usually has a better idea of what is actually happening than some of the larger concerns. They are citing greater costs for rail and truck shipments. He also added “yards aren’t as full as all these reports say.”
Another trading source in the Central district told SMU he thinks mills made a mistake by dropping obsolescent grades by $20 per gross ton (gt) in April. He said mills making hot-rolled coil and merchant bar are very busy and have raised their prices. Lead times are also stretching out. “Why would buyers want to disturb scrap at this point,” he questioned. Making matters worse, scrap suppliers have been hit with expensive fuel surcharges, he said.
Finally, he pointed out that when service centers hear scrap prices are falling, they tend to reduce steel purchases – thinking steel prices will follow. But this has not happened, at least not yet. He predicts shredded and HMS will trade sideways in May with prime grades up $20/gt.
A source in the Southeast region told SMU that inbound scrap flows to his multiple facilities are off this month by around 10%. He cited the price drop in April and increased fuel and energy costs as the culprit. As of right now, he predicts prices will be sideways in May. But he also cautioned it is still early in April. He noted the largest scrap buyer in his region only decreased shredded prices by $10/gt rather than the $20/gt others insisted upon. He thinks shredded scrap will be in great demand in May.
Heading back up North to the Great Lakes region, SMU spoke to a veteran scrap trader who had been travelling this week across several Northern states. He visited several mills and assessed they had moderate to low inventories of scrap, most of which was shredded and cut grades. Prime grades seemed to be in low supply. Likewise, when he called on several dealers, they were busy with scale traffic, but prime flows remained static. He is projecting shredded and other obsolescent grades to trade sideways in May. And he would not be surprised if prices for prime grades improved.
