During the first week of each month, referred to as “The Buy,” our team negotiates with steel mills to secure purchase orders for all ferrous grades. The remaining three weeks are then focused on fulfilling these orders. Various factors, including supply and demand, mill outages, export demand, weather conditions, and the availability of freight and cost, impact these negotiations. At BL Duke, we prioritize shipping point pricing and take full advantage of our ability to ship materials via truck, rail, and barge.
The outlook for March’s ferrous scrap metal market is bullish following two months of rising prices. Hot-rolled coil (HRC) prices have surpassed $800 per short ton, a notable recovery after struggling to stay above $700 for much of last year. Busheling futures are also increasing, with lots being traded daily. The full reinstatement of Section 232 tariffs on imported steel and aluminum could tighten scrap metal supply and strengthen domestic pricing, providing additional support to the ferrous scrap metal market
Tariff Implementation & Supply Chain Disruptions
A key market development is the reimplementation of Section 232 tariffs on steel and aluminum, set to take effect on March 12. However, recycled steel and aluminum imports will be excluded, just as they were in 2017. While these tariffs are expected to tighten supply and support domestic pricing, additional blanket tariffs could layer onto Section 232, adding further price pressure. These tariffs could disrupt supply chains, shift trade flows, and inject additional volatility into the market.
Chicago Faces Logistical Constraints
Transportation challenges are mounting in the Chicago market, as the 55-day closure of the Lockport Lock on the Illinois River (which will end March 11) restricts scrap shipments by water, creating further bottlenecks.
Capacity Expansion While the near-term outlook is strong, the North American sheet market is set to see 2.4 million metric tons of incremental capacity in 2025, with significant expansions from:
- Algoma, Canada
- Calvert
- Nucor Brandenberg
By 2026, another 1.7 million metric tons of capacity is expected to come online, which could have long-term implications for supply and pricing.