US scrap prices for the month of December are now seen sideways to November settles, slightly higher than was reported one week ago when market insiders assessed December scrap soft sideways to sideways, even as demand for new scrap from mills still appears to be limited, market insiders told SteelOrbis this week.
Even though reports of low industrial inflows at scrap collection yards continues to be somewhat bullish for scrap prices, insiders said the slight improvement noted in the price outlook recently has been more than offset by expectations for slower mill demand during the December buy cycle.
This week’s scrap market call matches a sideways call reported during the week of November 18, when improved market sentiment followed the November 5 US presidential election, as inventories were reported low at scrap yards, and forecasts for the first blast of cold weather and snow was expected to impact scrap markets the US Midwest and Northeast regions.
The more solid sideways December scrap assessment this week, seems to support the likelihood for slightly higher values, as recent storms across the upper Midwest and Great Lakes region has further reduced the movement of new scrap to collection facilities, insiders said.
“I need more scrap,” said one Iowa-based scrap insider, commenting on reports of depleted inventories and limited scrap availability from local yards. “We haven’t really seen a lot of snow here yet, but it’s coming for sure.”
Another insider that saw more snow and cold in his region had a similar opinion on inventories.
“My take on the December scrap market is that it will settle out sideways,” said one Midwest scrap supplier, commenting on the revised weekly December outlook. “I don’t see things playing out really well on both the supply and consumption side if markets go down,” he said. “We got hit with a really bad weather this week in Northeast Ohio, Western Pennsylvania, and around Buffalo, NY, slowing inbound and outbound scrap shipments. Everyone’s inventory is extremely low at both the dealers and mills, plus we’re hearing that there’s a growing optimism out there that the incoming president is going to bring prosperity back to the American economy in 2025.
Another insider concurred on the sideways outlook, preferring to focus more on reports of continued weak order books at steel mills than on politics.
“The volume of scrap that I’ve sold for December to mills is way down,” reported another Midwest scrap trader. “I’ve done some TBD (to be determined) sales with mills, but I’m thinking that demand is way down, because I’ve heard that (mills’) order books are not strong, especially for this time of year.”
The contact added that mills he spoke with appeared reluctant to carry much inventory into the new year, therefore he was expecting more limiting activity during the December scrap negotiations. “With all of this in mind, I’m still calling the December scrap market at best sideways,” he said.
A third scrap contact was briefer regarding a prediction for December, also venturing an expectation for the new year.
“The trend for December scrap is sideways,” he said. “And right now it’s looking sideways to higher in January.”
Based on a sideways to November settle, Ohio Valley shredded scrap is expected to settle near $385-390/gt ($391-396/mt) delivered to mill, while busheling grades are expected near the November settle at $390-415/gt ($396-422/mt). P&S grades are now seen at $376-386/gt ($382-392/mt) delivered to mill, while HMS I/II 80:20 grades are seen near $340/gt ($345/mt) on more limited Midwest demand requirements for heavy melt steel, market insiders told SteelOrbis this week.
On the US East Coast, December shredded grades are seen at $370-380/gt ($376-386/mt) delivered to mill, while busheling grades are expected to settle near the $400-$410/gt ($406-$417/mt) November settle. On the P&S front, December is expected at $340-350/gt ($345-356/mt), while HMS 80:20 scrap is expected to settle on a delivered to mill basis at $341-351/gt ($346-357/mt), market insiders told SteelOrbis.
The December buy cycle is expected to conclude by Tuesday, December 10, with monthly settle values available from SteelOrbis shortly thereafter.