Positive outlook for ferrous scrap market

The outlook for the ferrous scrap market seems to be on the rise, according to feedback from industry insiders. Despite June shipments remaining mostly stagnant, there is an air of optimism surrounding the market.

The implementation of tariffs on steel imports, whether at 25% or raised to 50%, appears to be influencing an increase in steel production within the US. This is a positive sign that could potentially boost demand for recycled ferrous materials.

In the Midwest, the closure of ArcelorMittal’s wire mill in Hamilton, Ontario, has led to a surge in orders from US-based producers of similar products. An industry source mentioned that he expects this uptick in orders to result in heightened usage of scrap at these mills. Furthermore, there has been observed growth in industrial scrap generation at several stamping plants in the area, indicating a steady business environment. The sentiment for July is described as “strong sideways.”

However, it may be too early to expect an increase in scrap prices for July, despite these positive factors. Notably, there is an abundance of scrap, particularly prime scrap, available from the Detroit and Ontario regions, as certain buyers in Ohio and Indiana did not have comprehensive scrap programs in place for the month. Nonetheless, with improved programs anticipated for the following month, this surplus scrap is expected to find suitable buyers.

A source in Northern Ohio emphasized that mills are unlikely to raise prices come July due to the absence of significant supply issues. As he stated, “The market is going sideways, no matter what.” Looking ahead, he posited that beyond July, the market will align more closely with the principles of supply and demand.

In the Southeast, another source echoed the sentiment that the July market is likely to maintain status quo with no decline in demand. Major consumers are reportedly operating smoothly, which will be further reinforced by the addition of two new consumers – Hybar in Arkansas and AM/NS Calvert in Alabama. The overarching consensus across various regions is that July will see a stable scrap market, with growing optimism for the months following. The industry is keen to observe if this newfound positive outlook will disrupt the downward trend experienced over the past two years.