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Lately, scrap prices have dropped in second half

By John Ambrosia - June 20, 2016

As 2016’s first half draws to close, some interesting trends have emerged, including the fact that scrap prices are slightly down from where they were exactly a year ago but much higher than six months ago, and that prices have risen or been roughly sideways in five of the six months of the year to date.

Industry Survey of Factors Affecting the Upcoming Market

Imagine having advanced notice of what your allies, competitors, peers and clients are thinking about what's to come in each new monthly scrap market. Scrap Trends Outlook, delivers an exclusive look at where prices, supplies, demand and other factors may be heading. Each month, Scrap Trends Outlook gives you a chance to listen in on the emerging industry conversation about the upcoming scrap market and provides a comprehensive tool for buyers and sellers to gaze into an industry consensus of where the price and availability of scrap may be heading.

Numbers and Letters

A quick look at key points expected to affect next month's markets


Through April’s market, for the year to date, export tonnages are running about 20 percent behind this time last year, with a total of about 3.5 million tonnes leaving the docks during the first four months of the year. After February rebounded from an historically low January market, exports decreased in both March and April, and possibly May as well.


Most respondents – 91 percent – to the survey expect prices to be down to a soft sideways to sideways in July, while only 9 percent expect to see price increases. P&S and shredded scrap are the weakest grades heading into next month, although there is a little more enthusiasm for the fate of prime grades, which could be sideways.


The Scrap Trends Outlook indicator number for historical pricing. During the past 10 years, prices fell across the board in only three of July markets, including last year. In five of those years, prices rose across the board. But July has been a month in which mixed pricing changes also are likely to occur, fitting in well with this month’s survey results.

Our Methodology

Scrap Trends Outlook Methodology: A numerical value is given to the overall trend for the upcoming month after all the survey results of a series of 15 indexes are calculated based on a weighted average. A number close to 50 will give a ‘sideways’ or ‘unchanged’ reading, while numbers above 50 will give a reading for a bullish trend. The closer to 100, the more likely it is that prices will trend upward. Conversely, a number below 50 will give a reading for a bearish trend. The closer to 0, the more likely it is that prices will trend downward. N/A means there were too few survey responses to publish a reliable figure.

Taking Account

A look at how Scrap Trends Outlook Index numbers for April stacked up against actual changes in last month's market.

Prime Grades

June Review
June Review
June outlook:
Bullish (56.2)
June's actual change:
Busheling: - $10/4% 
Bundles: - $10/4% 

Cut Grades

June Review
June Review
June outlook:
Bearish (41.1)
June's actual change:
No. 1 HM: - $28/11% 
P&S: - $28/11% 

Frag Grades

June Review
June Review
June outlook:
Bearish (42.8)
June's actual change:
Shred: - $29/11% 

Foundry Grades

June Review
June Review
June outlook:
Bearish (38.7)
June's actual change:
Punchings: - $8/2% 
Misc. Foundry: - $6/2% 

10 Things to Watch

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Prices stabilized on purchases made deeper into June, a potential sign for values heading into the July market
Summer slowdowns could diminish mill output
Inventories of available prime scrap could weaken
Historically, July has been a sideways-to-strong month
Mill raw steel capacity rates are still trying to inch up
Turkey’s relationship to the overall East Coast export market remains an unknown, could still make an impact
Despite production, steel orders may hit a lull
Supply still trails mill demand in some regions
Finished steel prices remain higher, so scrap could hold
U.S. economy still is showing some slight weaknesses

Notable Quotes about Next Month

" Consumer demand appears relatively flat heading into July. Supply will likely ease a bit on lower prices, however lackluster export demand will ensure adequate supplies."
" I see a supply-driven market, worldwide. I just don’t see much change to scrap volumes and prices right now."
" Scrap is in very tight supply. Everyday we ship more than we bring in."
" Domestic mills still slow. Scrap prices will be dependent on export demand."
" Coming into shutdowns, lower demand."
" Low demand, high supply."