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Detroit market realigned to reflect previous drop

By Bill Beck - February 8, 2016

The Detroit market for February is sideways, with no movement on pricing on any grades. However, due to factors that occurred prior to this month’s market, the Bulletin is making an adjustment to No. 1 heavy melting and No. 1 dealer bundles prices in Detroit to reflect changes that occurred last fall.

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


Prices have not risen across the board in nine years, since February 2007. And they have fallen every year since 2010, when the price direction was mixed. Market players have attributed this streak to the likelihood that price adjustments are made in February as a reaction to December-January periods, which often have risen in recent years.


The percentage of respondents in this month’s survey who expect prices to be sideways, either directly, strongly or weakly. But only about 14 percent say February prices could be down. The remaining 28 percent say they are expecting increases. Secondary grades are expected to lead the way in the market, with prime and foundry following those.


Prices have not been this low heading into a February market in 13 years. That was just before the huge export boom helped push prices to historic highs during the decade, and well before the Great Recession sank scrap values. Energy prices, a still less-than-robust economic recovery, imported steel products and cheap alternative irons are 2016’s culprits.

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 January stacked up against actual changes in last month's market.

Prime Grades

January Review
January Review
January outlook:
Bullish (58.2)
January's actual change:
Busheling: + $13/8% 
Bundles: + $13/9% 

Cut Grades

January Review
January Review
January outlook:
Bullish (64.0)
January's actual change:
No. 1 HM: + $13/9% 
P&S: + $20/12% 

Frag Grades

January Review
January Review
January outlook:
Bullish (61.7)
January's actual change:
Shred: + $17/10% 

Foundry Grades

January Review
January Review
January outlook:
Bullish (57.5)
January's actual change:
Punchings: + $20/5% 
Misc. Foundry: + $17/6% 

10 Things to Watch

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Turkey already has backed off demand this winter on exports; other buyers are sending mixed messages.
Economic signs are stronger than in recent months
The continuation of a rough winter could affect flow
Demand for scrap has gained some momentum
Scrap supplies remain tight, creating competition
Transportation availability may be reduced by weather as increased demand for rail and truck cars kicks in
Service center demand is expected to increase
Historical factors suggest February prices could weaken
Mill inventories, home and captive scrap are dropping
The market showed some signs of stabilizing in January

Notable Quotes about Next Month

" Lack of volume and inability of some mills to obtain all the scrap they bought will force prices higher in the North and Midwest."
" Inflow will continue at a snails pace. Some mills are seeing a slow down of deliveries."
" Other than Automotive, other industries just are not doing well."
" I believe it will be unchanged, but the market is showing or telling me it will give back $10 of the $20 from January."
" Mill demand should remain steady but the mills will have to push a bit harder to buy sufficient scrap."
" Very low inventory to ship to consumers."