Steel Products

Prime Scrap Tags Sink in September, Shredded and HMS Flat

September 13, 2023

Busheling prices fell precipitously during September. But domestic prices for shredded scrap and HMS were sideways in September vs. August, according to scrap sources surveyed by SMU.

Mills were in no hurry to buy obsolete grades, and dealers were in no hurry to sell at “down money,” one source said.

“So, ultimately, the market rolled into September sideways for obsolete grades but took a large step down for prime grades,” he said.

As for busheling, US mills have watched finished steel prices come down hard over the last 90 days. They therefore wanted to save money on scrap, “so they pushed the prime price lower,” the source added.

Potential Impact of UAW Strike

A United Auto Workers (UAW) strike is likely, sources said. But they didn’t agree on its impact on scrap.

“If there is a strike, then prime scrap will be scarce in the short term. I was surprised mills didn’t try to get more tonnage with better prices,” a second source said.

A third source was skeptical about a strike’s impact. “I feel that any strike would reduce bush to some specific homes. But I don’t think the broad market would be affected too much.”

Note that the UAW’s contract with Ford, General Motors, and Stellantis expires on Thursday at 11:59 pm, meaning a strike could come as soon as Friday.

Exports and the October Outlook

The export market remains firm on tight supplies and decent demand from Turkey and Southeast Asia, the first source said.

This has “put a footing under the market for shredded and cut grades,” he said.

“This support should continue for the most part, and it’s helpful that export shred and domestic shred remain at basically the same price levels,” he added.

Domestic scrap prices could be lower next month. The reason for the weakness: upcoming mill maintenance outages, the potential for a UAW strike to drag out, and the fact that October “is normally seasonally weaker,” he said.

SMU’s September scrap prices stand at:

• Busheling at $380-420 per gross ton, averaging $400, down $50 from the previous month.

• Shredded at $370-410 per gross ton, averaging $390, unchanged from the previous month.

• HMS at $310-350 per gross ton, averaging $330, level from the previous month.

Ethan Bernard

Ethan Bernard is a reporter and editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.