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“This isn’t Friday’s [December 2] scrap market any longer. The sentiment has changed since Friday and I don’t think cuts and shredded can go sideways now. And if shredded goes up, it will push prime up further,” a Midwest broker said on Monday December 5.
Optimism is stronger than it was on December 1, when market chatter suggested that cuts and shredded scrap could move sideways and prime scrap could move up $20 per gross ton.
“The longer the wait, the more expensive it becomes because demand has improved for the first quarter [of 2023],” the Midwest broker added, noting he thinks the market should be up $20 per ton on cuts and shredded grades and $40 per ton on prime grades.
Others expect that the market could increase by $10 per ton on secondary scrap and by $30 per ton on prime scrap.
In Detroit, cuts and shredded scrap have not increased since March and No1 busheling has not increased since April.
A seller into the Indiana and Chicago mills said time is ticking and sellers will soon be content to hold out for January. “Dealers are pushing for higher [prices for] cuts and shredded and that is the hold up. There will only be two weeks to ship with holidays approaching and many are closing the week of [December 19] for the year,” the seller said.
Fueling market participants’ optimism is a recent export sale to Turkey for shredded scrap at $380 per tonne delivered on December 1, which was a $15 per tonne increase from the prior sale.
There have been an estimated nine cargoes booked to Turkey in November, which represents a large volume of at least 270,000 tonnes committed to Turkey.
One Ontario source said cut grades are quietly being sold at higher prices and that shredded scrap has dried up in his area and is like “crumbs on the ground.”
One steel producer has been shopping for remote packages of busheling and paying higher prices for a week, according to a competing mill.
Sources say the market is likely to break on Tuesday December 6.
In the meantime, shredder feed prices fell in two regions and increased in the Ohio Valley on Monday.
Fastmarkets assessed the steel scrap shredder feed, fob Midwest at $114.59 per ton on December 5, down 0.69% from $115.39 per ton the week prior.
Fastmarkets assessed price of steel scrap shredder feed, fob Ohio Valley was $142.95 per gross ton on Monday, up 1.64% from $140.65 per gross ton on November 28.
Fastmarkets’ assessment for steel scrap shredder feed, fob Southeast was $122.18 per gross ton on December 5, down 0.83% from $123.20 per gross ton on November 28.