US Scrap Trends Outlook: December 2023

What’s the market sentiment for December?

• 77% of the market participants we surveyed expected higher prices in December
• 7.5% of respondents expected lower prices in December
• Trend consensus has risen marginally to 62% in December from 61% in November, suggesting that participants remain broadly aligned in the direction the market will take

Read on for a summary of the results of our US ferrous scrap market survey for December, or click here to download your copy of the full US Scrap Trends Outlook for December 2023.

The US ferrous scrap market is hotting up in winter months

Significantly depressed scrap flows are exacerbating December’s traditional seasonal market disruptions, stoking expectations for a slew of healthy month-on-month increases on all scrap grades.

Scrap flows into yards are reportedly reduced by 30% and steel mills are hungry for tonnage, heating competition for units. With December a notoriously short month, with only two solid collection weeks in the lead-up to winter vacations, the trade is expected to be frenetic.

The Trend Indicator has soared to a resolutely bullish posting of 69.3 ahead of December’s trade, compared to a more modest, yet still positive reading of 61.4 for November. The Trend Indicator is now at its highest since January 2023, when it was 70.5. The Outlook’s prediction model allows for an average month-on-month price increase of 9.1%.

The majority – 67.92% – of survey respondents deem that ferrous scrap prices will trend higher in December. Just shy of of half of those surveyed – 44.23% – attribute the expected increase to lower supply of material while a lesser 30.77% ascribe it to higher demand for scrap over the period. Interestingly, 45.28% of participants asserted that their inventories would remain unchanged in December versus November with 32.08% expecting levels to drop.

Prime scrap remains the front-runner in terms of price performance per participant over the next three months. Estimations for increases on No1 busheling and other prime grades have escalated ahead of December’s trade with recent increases in hot-rolled base prices to $1100 per short ton by two major US producers shoring up confidence in the upward trajectory of those grades. Some expect to see increases of as much as $60 per gross ton on No1 busheling in December.

Robust export is supporting December’s domestic market. Turkish mills have booked seven spot cargoes from the US East Coast in November, which is broadly considered to be the volume at which exports are considered a significant drain on domestic inventories, at a $34-35 per tonne increase compared to the onset of the month. Turkish mills are expected to book more material as they attempt to get ahead of the curve for January’s scrap fulfilment quota.

Confidence in market direction remains roughly on par with that of November, increasing to 62% in December from 61% the preceding month, suggesting that participants remain broadly aligned in their view that the market will increase over the period.