Research

Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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September 2019 | Steel Scrap and Metallics Forecaster


US scrap becomes a buyers’ market as weak demand puts mills in driver seat: North America Market Analysis


Weak vehicle output is only one of several weakening economic indicators in the US, all of which ultimately are having a negative effect on scrap demand.

US domestic scrap markets underperformed our expectations as prices plunged $30-40 per long ton in September negotiations. HMS and shredded prices fell by around $30 in Chicago, with similar dynamics seen in both Pittsburgh and Philadelphia. Prime scrap saw particularly sharp price declines, with rates down $40 in domestic settlements for Chicago, squeezing the differential between busheling#1 and shredded to just $10, the lowest seen since April 2018.

As the first chart shows, the drop in the differential comes despite a squeeze to US vehicle output. Combined US car and commercial vehicle output, as defined by Oxford Economics,...

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