Scrap Prices Drop for October: Are We Near a Bottom?

Steel Market Update ferrous scrap sources advised us over the weekend that scrap negotiations have wrapped up between the dealers and the domestic mills and that steel mills, once again, have walked away the winners as scrap prices dropped across the country. However, the weakest areas are those furthest away from the east coast where exports have helped keep the losses less pronounced due to a strengthening ferrous scrap export market. The question going forward is: have we reached the bottom for ferrous scrap and will prices moderate or rise from October levels?

A representative from one of the largest national scrap companies provided SMU with an overview of the trading in an email on Friday, “The scrap trade wrapped up late yesterday afternoon.  It was relatively slow to develop, however as buyer’s programs were limited and scrap processors were nervous about flows.  In the end, secondary grades were off $15-20/gt [gross ton] while prompt industrial was down $25-30/gt.”