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Domestic iron ore business is in the tank, too

By Bill Beck - November 23, 2015

Ferrous scrap dealers and brokers aren't the only members of the domestic metallics community dealing with low prices and an unprecedented lack of demand.

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 are just as likely to fall in a November as they are to rise. Prices have fallen across the board in five of the past 10 November markets. They did rise in 2012 and 2013 before falling last year. When prices do fall in November they do not tend to the extremes; most decreases over the past decade have been within 10 percent, with the exception of 2008.


The Scrap Trends Outlook indicator number on average for mill factors, which take into account anticipated mill scrap demand plus expected levels of production, orders, mill inventory, home scrap levels and any slowdowns or shutdowns. All of these point to a severe decrease in the need for scrap among buyers in the market, undercutting prices.


The percentage of respondents in this month’s survey who expect prices to fall. An additional 26 percent say prices could be sideways or soft sideways next month. Prime and shredded grades lead the way in expected market declines, with foundry grades also expecting to be weaker. That leaves only 2 percent of respondents looking for an increase.

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

Prime Grades

October Review
October Review
October outlook:
Bearish (39.3)
October's actual change:
Busheling: -$52/22% 
Bundles: -$52/23% 

Cut Grades

October Review
October Review
October outlook:
Bearish (36.0)
October's actual change:
No. 1 HM: -$47/23% 
P&S: -$48/22% 

Frag Grades

October Review
October Review
October outlook:
Bearish (37.4)
October's actual change:
Shred: -$50/22% 

Foundry Grades

October Review
October Review
October outlook:
Bearish (36.7)
October's actual change:
Punchings: -$50/11% 
Misc. Foundry: -$48/14% 

10 Things to Watch

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Export is expected to be weaker, especially from Turkey, but also with a downward push from Asia
Economic uncertainty in the United States continues
Supply still slightly outweighs demand in most regions
Various global crises could trigger problems overseas
Anemic production follows steel orders as they hit a lull
Prices fell more on purchases made deeper into October, a potential sign of lower values heading into November
Holiday slowdowns could further diminish mill output
Inventories of available prime scrap could weaken
Service center inventories are not good for orders
Mill raw steel capacity rates continue to stagnate

Notable Quotes about Next Month

" Mill scrap demand is lower and will only get worse. We won’t hit the bottom until we see signs of improvement in steel order books and production."
" These prices are stupid low. We are at a point where our customers have to pay us to remove their scrap."
" November+cold+snow=Good. Imports-steel-coil-bar=Bad."
" Scrap prices appear headed for another leg down as mill demand softens further in November. Destocking throughout the supply chain persists, leaving inventories."
" On the retail side those that make their living scrapping are working twice as hard and are the main supply now for shredders."
" Holiday month will reduce activity."
" November will likely represent the bottom for ferrous scrap prices as they’ve adjusted to more historical levels relative to oil, ore and steel. Q1 steel demand, while not robust, will be supported by more domestic production as trade restrictions temper imports."
" Wishful thinking that by mid-2016 the steel industry (will have) seen an improvement in orders and production rates."
" If they (prices) are not higher, there will be no scrap dealers left."
" Soft overseas demand."