Weak Scrap Flows May Temper Any Drop in Scrap Pricing

A week ago the predictions regarding March scrap settlement prices were for prices to be down $20-$30 per gross ton (or more). However, as Steel Market Update got deeper into understanding the market we found, due to weather and other issues, flows into the scrap yards have been slow which has caused the scrap suppliers to be late with deliveries into the domestic steel mills – especially in the Midwest.

One of the larger scrap companies told us in an email, “The weather disruptions in February wreaked havoc on flows and shipments of scrap across the region.  Many operations were down for three or more days.  Many suppliers are well behind on orders and mills are calling daily looking for shipments.  Net, net its likely many mills will keep contracts open into March and assess the markets as the week unfolds.  Early discussions are anticipating down $15-20/gt across all grades, but consensus seems to be building for weakness over the next 30-60 days.  I wouldn’t be surprised to see the markets back to October levels by April.”