Ferrous market ends 2024 in familiar rut

Lower ferrous scrap bids made by mills in the United States along with disappointing offers from overseas buyers have combined to provide a fitting if not positive end to the 2024 recycled steel market.

In the first three weeks of December, Davis Index reports recycled steel bids ranging $1 to $5 per ton lower than November’s, whether for domestic or overseas shipments.

Using the MSA Inc. Raw Material Data Aggregation Service (RMDAS) price for No. 2 shredded scrap grade as a yardstick, recycled steel gained value in just two out of 12 months between January and December.

Even those two monthly increases measured only $11 and $2 per ton, giving processors little chance to register gains in inventory value throughout the year.

In the RMDAS monthlong period from Nov. 21 to Dec. 20, the value of all three of the pricing service’s benchmark grades (measuring prompt, shredded and No. 1 heavy melting steel, or HMS scrap) fell nationally.

In mid-December, Davis Index reported prices for containerized ferrous scrap off the West Coast nearing a four-year low, with shredded scrap selling for $303 per metric ton free alongside ship (FAS).

At the same time, shipments off the East Coast were providing one of the few bright spots in the U.S. recycled steel market for generators, processors and shippers. Prices for heavy melting steel (HMS) scrap from the East Coast to Turkey were rising by up to $11 per ton in early December.

That market could have experienced a slight bump because of a genuine spike in overall demand for U.S. scrap at Turkish mills, or it could be an inventory buildup hedge heading into the potential return of a strike by International Longshoremen’s Association (ILA) workers in the eastern half of the U.S. in mid-January.

As of mid-December, ILA Executive Vice President Dennis A. Dagget was citing resistance to further automation as a negotiation sticking point. Dagget met with President-elect Donald Trump in December in an attempt to bring him onto the union’s side.

Recyclers are very much among those seeking to avoid the labor-management dispute from causing disruption to the global shipping network.

In early December, the Washington-based Recycled Materials Association (ReMA) was among 260 trade associations that jointly urged the ILA and port terminal and shipping lines consortium United States Maritime Alliance (USMX) to return to the negotiating table and reach an agreement before the Jan. 15, 2025, contract expiration date.

“Resolving this labor dispute is crucial to ensuring trade of recycled materials, as approximately 54 percent of U.S. exports of recycled products are traded through the potentially impacted ports,” Adam Shaffer, ReMA assistant vice president of international trade and global affairs, told ReMA News in mid-December.

Beyond the port uncertainty, generators, processors and shippers of recycled steel are unlikely to miss the lackluster prices of 2024. To what extent market fundamentals can offer something better in 2025 will be an object of great interest as a new administration and Congress prepare to take the reins in Washington in January.

A Global Steel Outlook Report issued by Fitch Ratings and its director of metals and mining Yulia Buchneva predicts an overall increase in the demand for steel in North America in 2025 compared with this year but contains a sentence that scrap processors may find discouraging.

“Fitch believes lower raw material costs in 2025 and companies’ strategic investments aimed at expanding higher margin value-added production and additional new low-cost capacity to meet demand will provide some margin support,” the New York-based company writes.