SMU Steel Summit Speaker Mike Marley Forecasting Lower Scrap Prices in August

Steel Market Update asked one of our Steel Summit Conference speakers, Mike Marley of MetalPrices.com to comment on why scrap prices moved lower as the month of July progressed compared to the early indications of higher ferrous scrap prices during the first few days of the month. Here is his response:

There were a couple of factors.  First, steel mills they placed price-to-be-determined (TBD) orders late last month and were assured scrap would be rolling in during the first half of the month.  Dealers who thought they could hold out for more money learned that the mills didn’t want their scrap and they (the dealers) started to back down on their demands.  The early $15 per ton price hike in Detroit for shredded was not a pacesetter as is sometime the case.  It just brought the prices of shredded prices there closer to the higher levels in other regions.  Also, David J. Joseph played a low-keyed role unlike the previous month when it was buying early.  Joseph’s brokers typically come into the market later than others and try to buy down and that’s what they were doing this month.  At the end of last week, they were offering to buy busheling at $10 per ton less than they paid in June.  Not sure that they got many takers.