Analysis
August 18, 2026
Miller on Scrap: Does quiet August signal soft September?
Written by Stephen Miller
August has been quiet thus far, with scrap suppliers working on completing their current orders as signals of a weaker September start to appear. However, sources say it will not drop very much, though everyone is not on the same page.
Over the last several months, the US market has seen prime grades trade sideways while shredded and HMS have dropped about $10 per gross ton (gt) each month. This price erosion of obsolescent grades of scrap has not materially slowed down the flows into dealers’ yards. However, there is a contingent who believes this cannot continue much longer.
SMU contacted a mill source in the Central district who told us the availability of scrap is “solid, with prime grades off a touch.”
He went on to say his inventory of scrap is very healthy. Regarding the September market, he sees a “soft sideways,” with another possible drop in shredded prices, and busheling staying flat again.
A trading source in the same district is seeing the September situation similarly. He believes shredded and HMS will be sideways to down 10/gt. Prime grades and plate and structural (P&S) will hold even.
The source says the drop in shredded tags over the summer has created a significant discount to busheling of $30-55/gt. If shredded does drop an additional $10 next month, this may cause mill optimizer programs to insist on melting more of this grade.
If this does indeed occur, the increased demand for shredded will tighten supply as the market heads into the winter months when seasonal strengthening is likely, especially with strong steel mill order books.
We also heard from a trader in the N. Ohio/Pittsburgh area who said he spoke with one of his steel mill customers who also thinks soft sideways is likely. He also heard mill-owned brokers will attempt to lower primes. There is skepticism about this possibility.
Another source in the Southeast region also considers the September scrap buy to be “soft sideways.”
He does not think primes can go down in his region. If the major buyers do try to take down busheling and do not attract enough, they will be stuck “springboarding” more expensive material from the North.
Regarding obsolete grades, he said “it’s a 50/50 chance” they will fall $10/gt. He noted US East Coast export activity has increased, but it has not affected scrap flows. He concluded by saying to keep things sideways, “it will be a fight, as always.”
In the Chicago and Midwest region, a scrap source said he thinks shredded could weaken slightly but HMS should trade sideways along with P&S and prime grades.
At this point, the sources with which we spoke are not sure whether the September market will settle prior to Labor Day.
