Markets were forecasting to be down $10GT through the last week of September and first couple days of October. However, as October 3rd approached, the buying sentiment picked up among most of the domestic mills as buyers began toying with sideways price offers. The Chicago and Detroit markets lead the way offering sideways numbers which acted as a sign to scrap suppliers that the mills may be “chasing tons” and in need of more supply. This began a domino effect that followed throughout the rest of the country where numbers have been firmed up at sideways levels. The price stability is largely due to lower inventory levels of scrap at the mills and as we move into winter, mills know that the scrap supply will weaken a little more as it typically does during the harsh winter months. Many reports and analysts are saying this is a good sign and may indicate that we have hit the bottom of the market.
Export markets saw a slight uptick in shipments, but prices continue to be weak. We have seen some slight temporary surges which may be expected to continue off and on, but no real movement in the overall market. There have been reports stating that there are buyers looking for bulk cargo loads on the West Coast, but there has been no indication on pricing and no shipments reported at this point. With a weak Yen and a struggling global economy this weak trend is expected to continue for exports.
Attached is a graph that help illustrate the recent up and down trends on base metals (Copper, Aluminum, Nickel) over the past 30 days. Through the peaks and valleys we have seen a slight uptick in pricing recently that is coming at the expense of high volatility in the markets. We have seen $0.01-$0.02 gains on Copper, Aluminum, and Stainless alloys, but remain cautious as the markets continue to fluctuate daily. The Government Shutdown and China returning to the markets from Holiday with current economic data will play large roles in how these base metals will trend in the coming weeks.
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