Ferrous scrap supplies will be disrupted by General Motors Corp.'s move to close or mothball four stamping plants as part of its new downsizing plans.

The big automaker's stamping plants are key to the steel industry since they generate the bulk of the sheet steel that is either baled into what are called factory bundles, busheling or sold as loose clips.

Some mills have what are called buyback contracts with nearby auto stamping plants. They hire a local scrap processor to bale or shear materials and...