• Ferrous Beat

Ferrous Market Update

Heading into November, Scrap Trends Outlook reports their November trend indicator is signaling extremely bullish at 64.9, the highest reading since March.

According to their report, “Almost two thirds of respondents to the survey forecasted higher prices next month after rebounding from a bottom in October. It comes as over a third pointed to higher demand as domestic mill buying is set to remain strong heading into the winter months, while overseas business activity is also forecasted to continue improving.” Both domestic mill demand and overseas scrap buys have certainly improved this year. Here’s the trend in domestic steel production and capacity utilization rates:


Year-to-date U.S. exports of ferrous scrap (excluding stainless steel and alloy steel scrap) were up nearly 27% by volume through August to 10.78 million metric tons thanks in part to stronger demand from Turkey, Mexico, Taiwan, India, Vietnam, Egypt, Bangladesh, and South Korea, among others. For the month of August, U.S. ferrous scrap exports improved to around 1.49 million metric tons, according to U.S. Commerce Department trade data.

YTD U.S. Ferrous Scrap Exports by Major Destination (ex- stainless steel & alloy scrap)

Meanwhile, iron ore prices have continued to surge higher. Macquarie Research cites 3 main reasons for the increase: “…a rush to boost steel output in China, before authorities there impose controversial winter controls; an incremental shift to lower-grade ores, as mills attempt to manage a margin-squeeze; and, a general strategy to hold utilization rates stable, in order to keep as many assets operating as possible, throughout winter.”


Looking forward, the World Steel Association is projecting global demand for finished steel will increase 3.9% this increase including a 5.0% increase in Asia & Oceania, 3.4% increase in Central & South America, and 3.1% increase in Africa.


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