Final Thoughts

It is still early in the process of negotiations between the domestic steel mills and their scrap suppliers. The steel mills are trying to pay the same prices for ferrous scrap as they did during the month of November and the scrap dealers are having none of it. The scrap suppliers are asking for prices to rise by at least $20 per gross ton. The expectation is for the month to have a modest amount of tonnage sold and the projections are at up $10 to $20 numbers. We should have a better feel later this week.

We need to watch the markets carefully over the next few weeks to see if momentum and lead times continue to move in favor of the domestic mills. With cold rolled offers out of China into Houston at $34.00/cwt-$36.00/cwt effective the spread is there to take market share – at least from the mills who supply material along the coasts. Midwest mills may be temporarily isolated due to the close of navigation through the Great Lakes. Although barges can get up the river for April/May deliveries.