Ferrous Scrap
RMU: Market experts predict sharp decline in July scrap prices
Written by Stephen Miller
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.
Editor’s note: This column appeared first in Recycled Metals Update (RMU), SMU’s new sister publication. RMU is devoted entirely to the ferrous and nonferrous recycled metals markets. If you’d like to learn more, visit RMU’s homepage and take out a free, 30-day trial.
Stephen Miller
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