During the first week of each month, referred to as “The Buy,” our team negotiates with steel mills to secure purchase orders for all ferrous grades. The remaining three weeks are then focused on fulfilling these orders. Various factors, including supply and demand, mill outages, export demand, weather conditions, and the availability of freight and cost, impact these negotiations. At BL Duke, we prioritize shipping point pricing and take full advantage of our ability to ship materials via truck, rail, and barge.
For the past few years, December has seen price increases in the scrap market, primarily driven by stronger export demand, rising Hot Rolled Coil (HRC) prices, and limited scrap availability that outpaced domestic demand. These factors forced mills to raise prices, contributing to the upward trend.
However, this year is different. Despite similar underlying conditions in previous years, the Chicago market is expected to settle soft-sideways in December. This lull is due to unseasonably mild weather, which has kept scrap flows steady, and stagnant HRC prices, that limited what steel mills are willing to pay for scrap metal. Weak domestic demand and limited export activity further suppress the market, while year-end inventory controls dampen buying interest. Although most mill outages are wrapping up, their prolonged impact on reducing scrap demand earlier in the year continues to weigh on prices, preventing the typical December price increase seen in prior years.
