Following December’s upward momentum, January’s ferrous scrap market is popping off with a strong start to 2026. Tightening supply, firm steel pricing, and supportive global signals are aligning to keep the market on solid footing as winter weather slows inbound scrap flows and reinforces supply constraints just as mill demand stabilizes. Non-ferrous markets remain mixed, with stainless and aluminum under pressure from weak demand, ample supply, and cautious buying tied to economic and policy uncertainty. In contrast, copper prices have surged to record highs, driven by tightening global supply, geopolitical risk, and tariff concerns that continue to restrict available material.
Chicago’s Ferrous Scrap Market
In Chicago, shred, steel
turnings and cut grades saw a $30 per gross ton increase. Prime grades also rose $20 per gross ton above December’s levels. Winter conditions are beginning to influence market dynamics as inbound scrap availability tightens across multiple grades. Export demand remains active, continuing to pull tons out of the domestic market and helping balance supply. Several mills entered January with reduced scrap inventories after drawing down material at year-end for accounting purposes, which translated into expanded buying programs compared to December. At the same time, hot-rolled coil prices are holding above $900 per short ton, reflecting sustained strength in flat-rolled steel demand and giving mills the margin support needed to maintain disciplined scrap purchasing. Futures markets are trending higher as well, signaling improved sentiment and expectations for stability to modest upside in the near term.
“January is starting with many of the same supportive fundamentals that helped stabilize the market at year-end,” says Lou Plucinski, President. “Tight scrap availability, firm steel pricing, and steady export demand are keeping the market well supported.”
Chicago’s Non-Ferrous Scrap Market
Stainless Steel
The stainless steel scrap market is largely unchanged this month, despite a recent uptick in LME Nickel prices. Demand remains sluggish, and scrap supply remains plentiful. The outlook for 304 stainless steel is especially bleak, with extremely limited domestic demand and virtually no export opportunities—particularly given the persistent weakness in the European market. As oversupply continues to outpace demand, prices remain flat and market momentum remains stalled.
Aluminum
Although trading markets have risen and aluminum scrap exports increased in 2025, the outlook for 2026 remains bearish. Ongoing uncertainty surrounding U.S. trade policy continues to weigh on market sentiment. Domestic demand is soft, with delivery appointments now booked 6 to 8 weeks out. This hesitation stems from broader economic concerns, as many anticipate the U.S. economy may face a significant downturn later this year. Both primary and secondary aluminum consumers remain reluctant to buy, citing oversupply and weak order books for finished goods. A potential recession in the second half of 2026 looms large, reinforcing cautious buying behavior.
Copper
Copper prices have surged to record highs, trading above $6.00/lb on Comex and surpassing $13,000/MT on the LME. This rally is being driven by tightening global supply and heightened geopolitical uncertainty, particularly surrounding the threat of new tariffs from the Trump administration later this year. Until there is clarity on the tariff front, global copper prices are likely to remain elevated, as tariff risks discourage ex-U.S. supply movement. Further straining the market, the ongoing strike at Chile’s Mantoverde mine has intensified concerns about supply disruptions in one of the world’s largest copper-producing regions.
