US domestic scrap pricing for the month of November is seen trending strong sideways this week, as mill buying is likely to be increased as more idled facilities will have completed annual maintenance programs by the November buy cycle, even as scrap inventories on the ground remain limited, market insiders told SteelOrbis this week.
During the October buy cycle, the majority of scrap trades reported in the Ohio Valley were discussed at $20/gt premiums to September settles, though insiders said today that some mills “further west” in the vicinity of Chicago and Detroit only paid sideways pricing to September for their limited monthly scrap purchases.
“Not everybody got plus $20/gt in the Detroit and Chicago markets,” said one Midwest scrap dealer. “Some people weren’t treated quite as well, and only got sideways for their October scrap. There were definitely a lot of back-door deals getting done for October. For November, it remains quiet, but the thinking is that scrap prices should be at least a strong sideways because there will be fewer outages next month, and inventories remain tight with suppliers. A key downside consideration is that typically, November and December are holiday months, so demand is a bit more limited.”
Based on $20/gt October premiums, Midwest busheling scrap on a delivered to customer basis for November is assessed at or above $375-395/gt or $381-401/mt, while shredded grades are seen at or above $370-380/gt, or $376-386/mt. HMS#1 is expected to trade at or above $340/gt or $345/mt, while P&S is expected to settle at or above the $365-375/gt or $371-381/mt October settles.
On the US East Coast, October markets were more regional, with HMS#1 grades up $50/gt, owing to strong export demand, while shredded grades advanced $25/gt. P&S and busheling grades were seen $20/gt higher. As such, November HMS#1 on a delivered basis is seen at or above the $350/gt ($356/mt) October settle, while shredded material is called at or above the $395/gt or $401/mt October settles. In P&S and busheling grades, P&S is seen at or above the $340-360/gt ($345-365/mt) October settle, while busheling is expected to settle at or above the $370-405/nt ($376-411/mt) October settles on a delivered basis, market insiders told SteelOrbis.