Ferrous Scrap Prices to Jump by How Much & Why are the Questions

The rumors about March ferrous scrap prices have been flying ever since prices rebounded early in February from the initial down $10-$30 per gross ton we saw in the early negotiations. As the month of February continued scrap prices rebounded and, in some cases, returned to levels seen in January. As we prepared for March negotiations our sources advise how they see market prices developing and what will be the key drivers to scrap pricing.

We heard from one of our sources located in the Ohio Valley, “The driving factor in today’s market is the lack of prime scrap which is due to; high demand, Nucor’s unexpected shutdown of their DRI plant, Big River start up and very low availability of pig iron.  Prime scrap will undoubtedly move up $45gt +.  If mills are unable to buy primes they will substitute with shred and plate increasing demand for these grades.  Also, melt shop software or “optimizing” programs may increase shred consumption if the discrepancy between prime and shred prices exceed current parameters. Adding to this are rising export prices with current offers from the US exporters reportedly over $300 CFR for HMS.  This is already $40-50 higher than February lows.  The majority of dealers sold all their stocks in Dec/Jan with very few having excess tons moving into March.  Seems like we will see prices exceed January levels and, in my opinion, these new levels will continue through April.”