Scrap Prices North America

Miller on scrap: What’s next for February?

January 26, 2024

The state of the US scrap market is not very well understood, according to the dealer trade. It seems steelmakers in several regions are still looking to buy scrap, several sources told SMU. If this is the case, these sources believe it may not be possible for the scrap buyers to take down the market in February, especially after their failed attempt in January. Such a move “would have no credibility,” one source added.

SMU reached out to another industry veteran. He said the prolonged subzero weather in the Midwest, Great Lakes, and the Ohio and Tennessee Valleys, have hampered deliveries of scrap to area mills. It has also caused a sharp decrease in inbound flows to their yards, as peddler trade is extremely limited. Many yards have elected not to run their equipment in this Arctic weather. All of this is contributing to a market in February that should be no worse than sideways, whatever that means now.

Another bottleneck for scrap shipments is on the Mexican border. Railcars cannot cross from Mexico, according to a source with knowledge of the situation. Several steel mills in southern Texas depend on shipments of busheling from Mexico. With shipments cut off, they have to source elsewhere, and they are reportedly still short.

The export market has dropped a bit in Turkey as they were successful in lowering prices from EUR origins to as low as $410 per metric ton (mt) for HMS 80/20. But US and Canadian origins have not dropped below $420 mt CFR, and that is not too much of a drop from its peak several weeks ago.

The pig iron producers in Brazil and Ukraine have tried to raise their prices by $10/mt, but no takers yet. The last confirmed sales were $480 and $497 per mt CFR for Brazilian and Ukrainian material, respectively.

All these things add up to a very firm market for February scrap. We are still a week or so out, but we’ll be following it closely.

Stephen Miller

Stephen Miller started his career in the scrap metal industry in 1978 at Luria Brothers in Cleveland. Over the last 40+ years, he has worked in all capacities in the trading business. He has had positions in both domestic and international scrap trading. In addition to scrap, Miller was at the forefront of the pig iron trade and established a pig iron distribution company under the name of Ferrosource, Inc. Most recently, Miller has concentrated on the scrap export market and regularly does consulting for several companies in the industry.