Analysis
July 21, 2026
Miller on Scrap: Heading for another sideways month?
Written by Stephen Miller
Traditionally, August is a month when scrap supplies start to shrink. Scrap dealers often report a slowdown of inbound flows of obsolescent material into their production facilities. However, the larger deficit in supply is from the industrial grades, which are impacted by vacation schedules and retooling at automotive related manufacturing plants during the month. Let’s see if these factors play a role in the August market.
Recall that scrap settled soft sideway this month. Will August follow suit?
Central region
A mill source in the Central district says he views the market as most likely sideways again for August with a chance for a modest reduction. He said he is hearing of some good scrap flows across the country and some bottlenecks at other locations that could push a fair bit of scrap back into the market.
He noted the exclusion of Brazilian pig iron from a 25% tariff should help in keeping the market sideways, especially for prime grades.
SMU also heard from a scrap trader in the same region. He said most mills are seeing the August market sideways. One of his mill customers told him their order books are strong and lead times are stretched out.
The mill did say there was some room to lower prices on shredded and HMS but they are hesitant to disrupt the flow of scrap.
He said, “They feel potentially more risk with scrap flows than the pickup of $10 when the underlying tone is so positive on all factors.”
South
Another scrap executive in the Southern region also views the US scrap market for August as “soft sideways.”
He said flows have not decreased so far. There may be room for shredded to trade down $10 per gross ton (gt) since shredder feed has taken a hit. He noted after shredded was forced down $10/gt last month, Zorba also traded down $10, which resulted in an effective overall $20/gt drop for shredded.
The source warned this could cause some of the larger suppliers of shredder feed to sit out shipping in August if mills did drop shredded prices. But the lack of shredded export activity could mitigate this possibility.
Midwest
We also spoke with a trading source in the Midwest who also looks at the August market at a “soft sideways” perspective.
He said there could be room for shredded and HMS to trade downward due to the September outages at mills in Texas and Iowa along with relatively healthy flows of shredder feed in his region.
However, demand for scrap is still quite high and any decrease should be modest. Regarding prime grades he said they are a “solid sideways” with a possible uptick if industrial production generation falls next month.
