Mild demand resulted in another month of sinking ferrous scrap metal prices across the Midwest, and the supply-demand imbalance is unlikely to change in the near future. Scrap prices remain under pressure due to scheduled summer outages at several key steel mills across the US, falling hot rolled coil (HRC) prices, and thinning order books.
Chicago’s Ferrous Scrap Market
Ferrous trade in Chicago advanced slowly this month due to extremely limited demand resulting in another period of soft, sideways prices. Prime grades decreased by $40 per gross ton, marking a 27% loss since the beginning of the year. Plate and structural prices fell by $30 per gross ton, while shredded scrap and heavy melt decreased by $10 per gross ton. Machine shop turnings and cast iron borings, typically the lowest-priced grades, were among the few commodities that managed to maintain their May values.
The scheduled maintenance outages at several key steel mills in June has soften scrap metal demand in Chicago. With Nucor’s Gallatin, Decatur, and Hickman mills, as well as NLMK’s Portage mill, undergoing maintenance, the reduced operational capacity lead to decreased demand for scrap metal. This decline in demand from major consumers can contribute to an accumulation of scrap in the market, potentially driving prices down further in July and exacerbating the existing supply-demand imbalance.
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Chicago’s Non-Ferrous Scrap Market
Copper experienced significant volatility in May, with prices surging nearly 11% before returning to the $4.60/lb. level on Comex by month-end. Market tightening has occurred due to the Cobre Panama mine shutdown and reduced output guidance from various producers. Despite strong Chinese copper demand, anticipated stimulus measures are expected to support further growth. UBS projects a 3% rise in global copper consumption this year, slightly lower than the previous 3.3% estimate, with the same projection for 2025.
Stainless steel scrap prices have remained relatively stable, even as LME Nickel prices rose by approximately $0.60/lb. over the past 30 days. As we approach the summer months, there are still many uncertainties about mill scrap demand. Inbound material flows have been slowing, and with scheduled shutdowns on the horizon, mill melt requirements remain unclear.
Secondary aluminum prices remain stable to slightly higher, while primary aluminum prices have seen a modest 3% increase over the past 30 days, reflecting the rise in LME aluminum prices. Export demand for secondary aluminum grades remains strong, which should help sustain prices through the summer months. Most domestic mill and smelter buyers report that aluminum scrap supplies remain tight, with no improvement in material flows.
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