Ferrous Scrap

Market experts predict sharp decline in July scrap prices

June 28, 2024

Sources contacted by RMU have delivered a bleak forecast for the market’s direction in July, potentially extending into August.

In the Northern Ohio district, a key source revealed that a major buyer has halted scrap deliveries due to an excess of material exceeding their reduced melt rate, attributed to a soft order book. This indicates a looming decrease in scrap demand.

Another source from the Chicago area reported no current holdups but mentioned warnings against overshipping existing orders. Typically, overshipments are carried over to the following month on a “price-to-be-determined (TBD)” basis, but mills are now avoiding this practice entirely.

These developments suggest that mills may cancel undelivered June orders, as electric-arc furnace (EAF) and integrated flat-roll steelmakers lack sufficient orders to support even stable ferrous scrap prices in July. Consequently, the trade could witness a significant price drop for prime scrap, likely dragging down obsolescent grades and busheling. Industry insiders do not anticipate mills returning to the market until after the July 4th holiday.

On the export front, the scrap market has been notably quiet. While export prices have remained stable for several months, a downward adjustment is expected as the US domestic market weakens, potentially affecting pig iron prices as well, though to a lesser extent.

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.