October Scrap Prices

The early forecast that October’s market would follow September’s upward trajectory was quickly dialed back when ferrous scrap trade kicked off earlier this week.  Chicago’s scrap prices settled sideways from September to October.

Recent price increases for finished steel alone were not enough to boost domestic scrap prices.  According to American Metal Market (AMM), export demand has fizzled and steel mills are long on inventory.  Midwest sellers are also limited to truck and rail homes as the Illinois River has been closed since early July.  Scrap dealers are looking forward to resuming barge shipments in November when the Illinois River is scheduled to reopen.

“Mills have continually suppressed scrap prices even when lead times are at 13 weeks and conversion rates are over $350,” says Lou Plucinski, President of BL Duke.  “Since the river closure, it seems Chicago dealers are content to sell tons at TBD formulas off of the AMM.  There are limited homes so local mills have had all the leverage.”

The aluminum and stainless steel markets are stable this month with very little price change following September’s gains.  Improvement in the automotive and construction sectors are driving  scrap demand.  Domestic non-ferrous consumers are actively buying with delivery availability within 30 days.  “This is a welcomed contrast to the lead time we experienced early this year,” says George O’Brien, Director of Nonferrous. “Lead times were out 60-days and some consumers were completely out of the market.”

Copper demand is stable however prices are volatile as they follow the financial markets.  Export demand for copper has also improved as China issued its 12th batch of non-ferrous scrap metal import quotas for 2020, with a much larger volume of copper scrap approved for entry into the country than in the previous two rounds of quotas.

Ready for a scrap pick-up?  Please reach out.  We’re standing by to schedule a pick-up.