August Scrap Market Forecast

Chicago’s scrap metal market met headwinds with prices dropping for the fourth consecutive month.  Supply concerns, however, have limited price downside and are creating some optimism ahead of August’s ferrous trade.

Chicago’s Ferrous Scrap Metal Market

Weak export demand, the 120-day river closure, cheap pig iron prices, and summer holiday shutdowns have added downward pressure to scrap prices.  Prime grades saw the largest decrease at down $30 per gross ton compared to June.  Shred is down $20 per gross ton and lesser grades such as No. 1 heavy melt and machine shop turnings are unchanged since prices are already low in Chicago. 

July’s trade showed strength at the end of the monthly buy creating optimism about the direction of August’s prices.  July is a short month due to holiday shutdowns. August is a 5-week month and steel mills will need to replenish their low inventories to cover production.  Regions settled disjointed with many markets moving sideways this month.  In the South, which includes the Carolinas, Arkansas-Tennessee, and Alabama, markets settled even to June’s prices, another good sign markets have found the bottom.

“Increased demand at the end of July’s trade gives me the feeling prices are dragging on the bottom of the market,” states Lou Plucinski, President.

Poor performance in finished steel has slowed scrap trading Metal Forecastglobally with very few cargo sales reported this month.  Turkey is the largest importer of US ferrous scrap metal however, Turkish mills have imported minimum scrap metal due to weaker steel prices and sales.  Thin trading is also being reported out of China, Vietnam, Taiwan, and India.


The 120-day river closure, which started on June 1st, has brought on multiple challenges for Chicago scrap dealers. During theJoliet Scrap Metal Recycling scheduled closure, no vessels will be able to pass through the Brandon Rock Lock, limiting scrap metal sales in Chicago to steel mills accessible by truck and rail.  Barges are not able to travel south to electric-arc furnace mills on the lower Mississippi River.  Scrap dealers, with rail access, will increase their demand for railcars between June 1st – September 30th and are struggling to find available cars.

Chicago’s Non-Ferrous Scrap Metal Market

Thus far July’s non-ferrous scrap prices are also facing headwinds. Copper and brass prices are down nearly 3% this month, with no changes as of today.  Aluminum prices are down over 3%, with domestic mill delivery appointments now out over six weeks.

Scrap Metal PricesNickel and 300 series stainless steel scrap metal prices continue to trend down as well but much more rapidly, with prices falling nearly 17% in the first ten days of the month. Weak stainless-steel mill demand, along with the U.S. preparing for another Fed rate hike are sighted for the sharp price decline. The drop in ferrous prices has put pressure on the ferritic stainless prices as well. While the prices for 400 Series grades prices have not declined as much as the 300 series grades, prices are still off almost 10%, depending on the alloy.

On an interesting note, last week the LME announced it will reduce the daily price limits for copper and aluminum beginning July 24th of this year.  This should help to stabilize the markets and avoid violent price swings and perhaps stop the bleeding. If you recall, nickel experienced such wild swings in March of 2022 the LME was forced to suspend the trading of Nickel for over a week.

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