As we look ahead to May, the domestic scrap market is expected to remain strong and stable, supported by improving demand fundamentals. Many of the planned steel mill outages that weighed on consumption through March and April have now wrapped up, allowing melt rates to recover—particularly for prime grades tied to flat-rolled production.
At the same time, elevated Hot-Rolled Coil (HRC) pricing continues to support mill buying appetite, while pig iron prices remain high, reinforcing the value of prime scrap as a cost-effective alternative. Improving weather conditions are contributing to steady inbound flows, but stronger domestic demand is helping absorb supply more efficiently.
Key Market Factors
Prime vs. Obsolete Spread Widens – Prime grades are expected to rise while obsolete grades remain sideways, driving further price separation.
Strong HRC Supporting Prime Demand – Hot-rolled coil remains above $1,050/ST, reinforcing mill demand for prime grades.
Higher Pig Iron Prices – Imported pig iron near $605/NT FOB New Orleans continues to support domestic prime scrap pricing.
Mill Utilization Near ~80% – As mill outages wrap, higher operating rates support stable-to-strong pricing, especially for prime grades.
Water Levels & Lockport Closure – Monitoring Des Plaines River levels and the Lockport Lock closure (through May 19); BL Duke remains the only Chicago scrap company with barge access unaffected, ensuring consistent material flow and service.
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How BL Duke Navigates the Market
During the first week of each month—referred to as “The Buy”—our team works directly with steel mills to secure orders across all ferrous grades. The following weeks are focused on executing and shipping against those commitments.
Market dynamics such as supply and demand, mill outages, export activity, weather conditions, and freight availability all play a role in shaping these negotiations. At BL Duke, we focus on shipping-point pricing and leverage our multi-modal capabilities—truck, rail, and barge—to move material efficiently and maximize value for our customers.
Chicago’s Ferrous Scrap Market
In Chicago, May is expected to trend strong to slightly higher on prime grades, while obsolete grades remain largely sideways, continuing to widen the spread between grades following April’s initial separation.
Market Drivers. Prime scrap remains supported by strong domestic mill demand, elevated HRC pricing, and higher pig iron replacement costs, while improved weather and steady inbound flows are keeping obsolete supply more balanced, limiting upward price movement.
As most planned outages from March and April wrap up—with only limited downtime extending into May—steel production is rebounding and holding near 80% capacity, signaling strong underlying demand and supporting continued scrap consumption, particularly for prime grades.
Logistics & Market Access. We are closely monitoring water levels on the Des Plaines River, along with the Lockport Lock closure (March 31–May 19) on the Illinois Waterway. While thisis limiting barge traffic for many market participants, BL Duke remains the only Chicago scrap provider with barge access not impacted by the closure, ensuring consistent material flow and service during this period.
We will continue to monitor the market closely and update this forecast as new information becomes available leading up to the monthly trade.
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