US ferrous scrap for the month of October is now seen sideways to soft sideways to the September scrap settle pricing as an ongoing dockworker strike at US East Coast and Gulf Coast ports is expected to have minimal impact on October export scrap, much of it already being in transit to overseas ports. Insiders cautioned though, that the longer the strike drags on, the more likely it may be that domestic scrap availability will rise as future exports for November and December scrap are likely to be curtailed.
The October call differs from the week of September 23, when the call was mixed depending on whether the now ongoing strike at 36 unionized US port facilities from the Gulf of Mexico to Maine occurred.
Insiders told SteelOrbis during the week of September 23 that should a strike occur, a weak sideways settle for October was likely because more scrap supply would be available for domestic markets, unless scrap exporters were successful in getting the shipments re-routed around growing daily bottlenecks at unionized ports. Recent moves by the US Federal Reserve and China to stimulate their flagging economies also could be somewhat supportive for global scrap prices, they said, though they cautioned it will take some time for their affects to manifest, even as new finished steel demand remains largely unchanged.
“Scrap prices were already likely to fall for October because of continued low domestic demand,” commented one SteelOrbis market insider. “As we see it, the strike is likely to have minimal impact on October export scrap, even though global pricing changes this week with the recently announced China stimulus could be somewhat supportive over time. That’s why we’re seeing it weak sideways and not lower for October. It’s just too early to tell whether the Chinese market stimulus will have a lasting impact on global steel and scrap prices. If so, some of that affect could spill over into the US markets.” The contact added that the longer the strike continues, the outlook for November was “potentially higher.”
“As Chinese billet prices have spiked, we may see more interest in US scrap from overseas importers, however, it’s too soon to call the scrap market higher until we know whether the recent hike in market sentiment overseas as a result of China stimulus has any legs,” said another SteelOrbis scrap insider. “Traders are taking kind of taking a wait and see attitude regarding recent changes in global steel market sentiment.”
During much of September, SteelOrbis reported the October outlook little changed with most respondents surveyed calling October scrap sideways to higher, as supply remained tight at local scrap collection points due to low paid prices to collectors, and fewer US steel making facilities expected to be offline for maintenance during October compared with September, resulting in improved scrap buying from mills, they said. The recent strike, however, has changed the sentiment as more scrap is expected to be available domestically because of reduced exports going forward, especially if the strike lasts more than a few weeks.
Recent changes in global sentiment aside, domestic demand for US domestic scrap remains skittish, as finished steel demand is unlikely to show much improvement until the first or second quarter of 2025, market insiders said.
“If the strike lasts more than a few weeks, we could see some effect on global scrap prices, but at this point it’s too early. We’re just trying to see if the recent higher market sentiment will last once the Asian markets start to trade after the Golden Week holiday ends on October 7,” another insider commented. “We’re not expecting the markets to improve much until next year.”
“The markets need time to digest the news,” said another market insider. “The recent US Federal Reserve rate cut, and the China stimulus could be supportive for global steel, however, it will take time for those actions to trickle down to the pricing markets.”
A sideways to soft sideways call for October scrap would peg US Midwest prime busheling scrap steady to down from the $355-375/gt ($361-381/mt) delivered to mill September settle price. October shredded scrap is expected to settle steady to down from the $350-$360/gt ($356-366/mt) September settle, while September HMS#1 is seen steady to lower from the $320/gt ($325/mt) September settlement. P&S scrap, which settled sideways for September, is seen steady to down from the $345-355/gt ($351-361/mt) delivered to mill settlement, insiders said.
On the US East Coast, September busheling scrap is seen steady to lower than the $350-385/gt ($356-391/mt) delivered to mill September settle, while shredded scrap is seen steady to lower than $370/gt ($376/mt). HMS#1 and P&S scrap are seen steady to lower than the $290-315/gt ($295-320/mt), and $320-340/gt ($325-345/mt) delivered to mill September settlements, respectively, market insiders told SteelOrbis.