Ferrous Scrap
Unraveling the enigma of April's scrap market dynamics
Written by Raymond Peterson
April 11, 2024
For those of you old enough to remember The King and I, the April scrap market seems to be a puzzlement. While it is now clear that everything went sideways, one could clearly make an argument for prices to have been down.
With the announcement of up to seven April outages in the flat rolled sector of the steel industry and several other mills not running at full capacity, it would not have been difficult to push prices down at least another $20 per gross ton (gt).
From what I have been able to determine, the plants feeding the auto industry have not backed off significantly their production of prompt industrial scrap. I have been told that the flow of shredder feed increased during March, and there has been an increase in demolition projects, especially in the Cleveland market. A number of dealers are not seeing robust flow of scrap across their scales but that is nothing new.
Putting this all together, one could certainly see at least some downward pressure on scrap pricing in April. Two weeks ago, I was hearing a “sloppy sideways to down 10-20.”
And then things started to change. I noted that the minions of a very large scrap company were not out making the rounds of the smaller dealers to talk the market down. This flew in the face of tradition, so something was up – or at least sideways.
In fact, I was told by several very reliable sources (aren’t they all?) that the aforementioned scrap company was actually pushing sideways very hard. ‘Tis a puzzlement!
So, what does this mean for May and beyond? I would like to say that I have good idea of what is to come but that would not be very accurate. My feeling at present is that we have reached a bottom, but steel imports increased in March, and I don’t have an optimistic view of the overall economy.
The best I can say is that without any significant pressure on either side of the steel/scrap divide, May pricing is probably not going to be drastically different from April.
Raymond Peterson
Read more from Raymond PetersonLatest in Ferrous Scrap
DJJ subsidiary opens recycling facility in Florida
Trademark Metals Recycling opened an advanced metal recovery facility in Bushnell, Fla.
November ferrous scrap tags land a soft sideways
Ferrous scrap prices were largely rangebound to down at the November settle, market sources told SMU.
Still waiting for November scrap settle post-election
The US and Canadian ferrous scrap markets for November have not settled following the US presidential election. There doesn’t seem to be a key indicator as to why November prices haven’t settled yet. For the ferrous scrap market, I can’t see a big change occurring. Nothing short-term, anyways. The mills don’t seem to have a view, either, or at least they aren’t showing a lean in any direction.
Export prices vs. domestic scrap market: Who’s in control?
As we await the formation of November’s domestic ferrous scrap market, all the recent action is in the export market. However, it is debatable whether events in this arena are influencing our US market other than psychologically. This opinion has been expressed by several sources that I have approached.
Gerdau closes on Dales Recycling buy
Gerdau Long Steel North America completed its previously announced acquisition of Dales Recycling Partnership, a Tennessee-based operator and processor of ferrous and nonferrous scrap, on Nov. 1.