The U.S. recycled steel market concluded 2024 with significant price declines in December. This created a challenging environment for ferrous scrap processors and shippers. Domestic mill bids fell by $1 to $5 per ton from November. Overseas offers also disappointed. This reflected a year of limited price increases, hindering processors’ inventory value gains. Davis Index reports minimal price rises throughout the year, making profitable market capitalization difficult.
West Coast Plummets to Four-Year Low, East Coast Shows Fleeting Strength
West Coast containerized ferrous scrap prices hit a near four-year low in mid-December. Shredded scrap valued at $303 per metric ton FAS signaled serious profitability concerns. Conversely, the East Coast saw temporary price increases for HMS scrap, rising up to $11 per ton due to Turkish mill demand. However, the overall global market remains weak, offering little hope for recovery.
Port Labor Disputes Threaten U.S. Scrap Export Stability
The International Longshoremen’s Association (ILA) workers’ union’s potential strike in January 2025 adds further uncertainty. Automation concerns drive this dispute. A strike could severely disrupt U.S. recycled material exports. Affected ports handle 54% of these exports. Trade associations, like ReMA, urge negotiation before the January 15 contract expiration.
Fitch Forecasts Steel Demand Growth but Warns of Scrap Processor Margin Pressures
Fitch Ratings predicts increased North American steel demand in 2025, offering potential market relief. However, they caution that scrap processors may not significantly benefit. Low raw material costs and increased production capacity for higher-margin steel could pressure scrap prices. Strategic investments in low-cost steel production may undermine scrap processor margins. SuperMetalPrice notes the importance of these trends for the broader metals recycling industry.
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