February Ferrous Scrap Trades Sideways

Scrap guru Mike Marley told his clients on Friday, “Though ferrous scrap prices may be unchanged in Detroit and other regions of the country this month, they may be weakening elsewhere if the subtler actions by some dealers and traders are any indication. Several Midwest brokers said they have been flooded with requests for price to be determined (TBD) orders last week and again this week. In many instances, said a veteran Chicago area broker, the dealers are seeking homes for excess supplies of cut grades like five-foot plate and structural scrap, and prime industrial scrap like busheling and bundles.”

One of our East Coast scrap sources told us, “Trading is not completely finished, but it’s correct that the market mainly moved sideways in areas around the country that have traded so far. Mills along the coastal areas where the market had moved higher due to export demand are not finished trading yet, but they should move sideways as well unless the mills are OK with buying less scrap this month, in which case the mills may succeed in pushing the market lower by a few dollars. Export docks have lowered buying prices recently in line with that market, but it’s unclear how much they are able to buy at the lower price levels.  

“The general sense among export participants is that the markets overseas are at or very close to bottom. And the sense here is that demand is stable and likely improving in the coming month or so. It’s also not lost on the mills that stable scrap prices will not interfere with their recent finished steel price hikes. Those factors combined with some continued weather and transportation challenges made for a relatively easy trade this month.”  

Steel Market Update will continue to monitor scrap prices as the balance of the steel mills finish their negotiations early this week.