Bohemian I wasn't saying all yards do it. You have to ship product in order to stay cash positive. You can't keep buying and buying without shipping it isn't going to work. I am just saying you might only ship 5,000 tons instead of doing 8,000. or 10,000 tons instead of 15,000. When the mills lower there buying prices allot of people big and small sit on there inventory and sell when the price goes up. What goes up must go down and what goes up must come down. Its the nature of the Beast Called Scrap. I also see prices rebounding next month. We had a positive PMI index for the first time in four months for September and hopefully it was just a summer lull for manufactures. I am hoping for another 50 plus PMI next month. While Europe is having an atrocious time with manufacturing they haven't had a positive month in forever and China having a negative PMI for the first time since 08. Things are starting to look gloomy. Except here in America were we are on the plus side. I don't know if its service centers restocking there inventory after emptying out there warehouses or if we are really experiencing a small manufacturing boom for the last few months of the year. I am hoping for a positive PMI for the rest of the year. I am also hoping for good unemployment numbers to come out in the next few days showing we added more manufacturing jobs in September and more private sector jobs then the analysts from the big banks and hedge funds predict. I would expect after little selling activity for October by the yards that next month the mills will have to raise there prices to bring out the scrap or else if they go down again no one will be selling squat because they wont have the inventory to even fill big orders with two big down months in a row. Mills will have to close down (Hot idle) in order to bring things in line with scrap being sold and melted because you can't run at 80 plus percent mill capacity when yards aren't selling enough material to be melted. Now when yards are selling more scrap then can be melted and mills are sitting on thousands and thousands of tons of scrap that would take them months to melt like in Sept, Oct, Nov. of 08 the price is going to drop like a rock but that is not the case this year. We aren't selling scrap like its going out of style and sitting on thousands and thousands of tons of unprepared and the yard is so stuffed you can barely move around in it. Its simple math in my book. Oh and another point I would like to ad is have you seen the price of scrap substitutes lately HBI and iron ore prices have also been creeping up.
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