AMU Survey: MWP/UBC expectations and scrap outlook

Midwest premium expectations

January responses illustrated a shift back toward expectations for a higher Midwest premium relative to the prior month, with fewer respondents anticipating declines.

That movement aligns more closely with the historical Midwest premium data after December when “higher” responses hit an all-time low of 12% of the response total. Meanwhile, the share of respondents expecting a higher Midwest premium rose to 40%, which is the second highest share, tied with the first time a survey was conducted in March 2025 and below the highest share of 66% a couple of months prior in October.

Even so, January does not stand out as extreme. Several months prior to January registered readings within five basis points of the 40% level, placing the month closer to the upper end of historical data going back 11 months. What distinguishes January is not the magnitude of the increase, just the direction of the shift.

The survey window closed as the Midwest premium climbed to a fresh all-time high range of 98.5-99.5 cents per pound (¢/lb), according to CRU’s weekly assessment, and surpassed the $1 per pound mark by the week’s end. As a result, January responses on the Midwest premium direction reflect expectations formed while prices were still moving higher rather than after that level had stabilized.

Conversely, the share of respondents expecting a “lower” Midwest premium fell to its second-lowest level since May, while half of respondents anticipated a “flat” delivery premium.

Segmenting by value-chain role shows expectations for declining premiums cluster almost entirely among manufacturers and assemblers. End market exposure reinforces that distinction, as respondents tied to packaging and industrial equipment skew more heavily toward higher expectations, while construction-exposed respondents gravitated toward stability.

UBC price expectations

January expectations for UBC pricing show a clear tilt toward stability compared with recent months. The share of respondents expecting stable prices increased to 65% in January from 46% in December, reversing part of the volatility seen in the last month of the year.

Over the same period, the share of respondents anticipating lower prices fell to 12% from 31% in the prior month, while expectations for higher prices remained unchanged at 23%. As downside expectations receded, the share anticipating higher prices, though still well below those expecting stable UBC prices, rose to the second largest share among the three response options. This marks the first time since AMU began tracking next-month UBC price expectations in July 2025 that “higher” ranked second rather than third.

In historical context, January’s distribution sits closer to the center of the UBC expectations range than the prior two months. While stability dominated earlier points in the historical data, January stands out for the sharpness of the rebound rather than its absolute level.

Inventory management

Responses from scrap recyclers and processors to the survey question on inventory management show a distinct inventory profile relative to the rest of the survey. Within that group, 80% reported maintaining inventory levels in January, while the remaining 20% indicated drawdowns.

That said, January marks a partial return to steadier positioning for recyclers but with less balance than several prior periods. Throughout much of mid-2025, recycler responses more frequently split between maintaining inventory and drawing down.

At the same time, prior periods periodically included meaningful shares reporting inventory building, a feature entirely absent from January’s recycler responses.

Among non-scrap respondents, 79% reported maintaining inventory levels and 14% reported building inventory, while only 7% reported drawing inventories down. Compared with earlier periods in the series, this represents one of the strongest concentrations of steady positioning combined with a re-emergence of inventory building that had been largely absent through much of 2025.

When viewed alongside recycler responses, the contrast is structural rather than marginal. Scrap recyclers and processors continue to report some degree of drawdown behavior and show no inclination toward inventory building, while non-scrap respondents increasingly cluster around stability with a modest bias toward accumulation.

Historically, scrap recyclers and non-scrap respondents have not moved in lockstep on inventory management. In several mid-year periods, the gap between the two groups was pronounced, with recyclers maintaining steadier postures and non-recyclers reporting drawdowns at substantially higher shares.

That relationship began to narrow late in the year, but, even at that point, the alignment remained partial rather than complete. Recyclers continue to show a drawdown component that is largest absent among non-recyclers, while non-recyclers reintroduced inventory building that recyclers did not report at all. That said, January marks a notable compression in behavior between the two groups.

Scrap availability

January responses continue to show most survey participants reporting sufficient obsolete scrap availability to meet demand, but that aggregate result masks a pronounced split by company role.

Across the fully survey, 69% of respondents indicated that enough obsolete scrap is available, while 31% reported insufficient supply.

Segmenting responses by role reveals a materially different assessment among scrap recyclers and processors. Within that group, 60% reported obsolete scrap availability is insufficient, while 40% indicated supply is adequate.

By contrast, respondents outside the recycled segment showed broad confidence in current availability with 82% reporting sufficient obsolete scrap and only 18% indicating a shortfall. share of respondents answering “yes” to whether enough obsolete scrap is available settled at 69%%, while 31% indicated that supply is insufficient.

January’s full-survey reading (including both scrap recyclers and the rest of company roles combined) of 69% “yes” and 31% “no” marks a step down from December’s 87%, but it does not completely break the historical range observed over the rest of the historical data.

Three months ahead

Expectations for supply conditions three months ahead diverged even more clearly by respondent role.

The forward-looking responses introduce greater dispersion than views on present availability, particularly between scrap recyclers and other market participants.

Among scrap recyclers, expectations tilt decisively toward tighter conditions. Most recyclers—67%—anticipate undersupplied conditions three months ahead, while smaller and equal shares of 17% expect balanced conditions and oversupply, respectively. Given the nature of recyclers’ operations, these respondents are most likely framed specifically around scrap availability rather than broader market conditions.

By contrast, respondents outside the scrap recycling segment express a more centered outlook.

Among non-recyclers, 58% expect supply conditions to remain balanced, 33% anticipate undersupply, and 8% point to oversupply. Because the question does not explicitly reference scrap, these responses may reflect expectations across a wider set of inputs or finished products rather than scrap alone.

Looking ahead

The most recent survey results point to a market that appears steady at the aggregate level but uneven beneath the surface.

Expectations for higher Midwest premiums and more stable UBC pricing mark a shift from the volatility seen in late-year survey responses, while scrap availability continues to be viewed as sufficient by a majority of respondents in both current and historical context.

At the same time, recycler-specific responses, particularly around inventory positioning and three-month supply outlooks, introduce a layer of uncertainty that contrasts with the more anchored views noted by producers, manufacturers, and traders.