The last few months have been rough on scrap metal prices as the metal commodities market has taken quite a hit. The drastic drop in demand overseas coupled with the end of year scheduled mill closures have caused prices to drop to the lowest they’ve been in decades.
The article only discusses the steel market but it’s really starting to affect the copper, aluminum & nickel markets. People’s skepticism about China, Turkey and Europe’s financial situation is very unsettling to scrap traders.
As the article goes over below there is still no optimistic view on when we will come out of this slump. Everyone keeps hoping that in 2016 the prices will change but that as we know isn’t guaranteed.
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Scrap Sellers Weary of Continuing Price Fall
PITTSBURGH Ferrous scrap sellers are growing weary of perpetually falling prices as the November market continues to develop.
(Its a) totally ugly market completely opportunistic buying going on, a Midwest recycler source said. Brokers and mills are trying to squeeze the last juice out of the market, and only dust is puffing out.
The North and South Carolina markets settled with dealers agreeing to accept a $10-per-ton reduction on cut grades, shredded scrap retreating $10 to $15 from October and prime grades falling $15 per ton.
One seller into the Carolinas said that he had limited his sales because prices continued to slide. I am being stubborn. I would rather hold and speculate than sell down $10, he said.
A shredder selling into the North Carolina market was glad to have made a sale at down $10 per ton on cut grades. I was told this morning that it would have been down $15 if we settled today, he said Oct. 5.
In the Alabama market, prime grades retreated $17 per ton, with prices down between $15 and $20 to most producers, while other grades, including shredded scrap and cut grades, settled down $10 per ton.
Detroit has settled, with the remaining mill following the Oct. 4 lead and buying prime and cut grades at a $20-per-ton discount and shredded scrap down $15 from October. Shredded scrap avoided the larger discount because the flow to shredders is already slowing.
Any further price erosion and the material flow would be severely reduced. This commodity is extremely price elastic (sensitive), a shredder source said.
The Chicago market, the weakest area in the country, is poised to give up $30 per ton on heavy melt and $15 on turnings, but price reductions on shredded scrap and busheling remain uncertain as one mill buyer has not yet completed his program. Prime sales are being reported at down $30 per ton and shred at down $20.
Three of the Chicago-area mills are buying no scrap and one mill is buying less than 10,000 tons, forcing players to springboard material to wherever a home can be found.
One major integrated mill is not buying scrap in any cities where it operates, including Chicago, further dampening the opportunities to sell material.
A waiting game is being played out in several markets, with prices yet to settle on volumes already shipped in the Ohio Valley.
Mill buyers in Pittsburgh were hoping to settle Oct. 5, but did not provide strong indications of that happening by late in the day.
There are no grades really in demand, one Pittsburgh mill buyer said. Business is so sketchy and crummy, people are just waiting around to find out what the requirements will be.
Hamilton (Ontario) is still in limbo, according to one supplier source in the area who sold some scrap into Detroit and in the South while waiting for the local market to settle.
Another supplier said that an outage at one Hamilton mill was cutting its intake by 40,000 to 50,000 tons this month. Youd think prices would come down to a level where flows will be increased, but the mills arent really too interested in buying, he said. Its a general trend in the industry, not much different in Chicago, Pittsburgh, Detroityou name it.
Another Hamilton supplier said demand for prime grades was decreasing, resulting in larger price drops, despite a booming automotive industry that demands the remelted scrap. Mills have the inventory, so the consumption need isnt there, he said. They also know primes are tied to manufacturing, which is tied to formulas, compared to cut grades that wont flow at low numbers.
Another Cleveland supplier held out some hope for flat pricing in November. It might go sideways tomorrow, you never know. Every time someone isnt doing anything, you find a window, he said.
Dan Israeli, New York, contributed to this story.
http://www.amm.com/Article/3504057/Scrap/Scrap-sellers-weary-of-continuing-price-fall.html
