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After the first two months of fall reflected that very word regarding ferrous scrap pricing, sellers in November were able to fetch as much as $50 to $53 per ton more for their scrap.

December 7, 2012
Recycling Today Staff

After the first two months of fall reflected that very word regarding ferrous scrap pricing, sellers in November were able to fetch as much as $50 to $53 per ton more for their scrap (depending on the grade and region).

Spot market transaction averages calculated by Pittsburgh-based Management Science Associates (MSA) for the Raw Material Data Aggregation Service (RMDAS) show that mill buyers on the spot market bought scrap for from $32 to $53 more per ton in the November buying period, which ran from late October through Nov. 20.

The rebound was helpful to scrap processors and shippers who had watched the value of their inventories drop throughout much of the previous 60 days. No. 2 shredded scrap that could be sold for an average of $408 per ton in August was worth just $344 per ton on average during the October buying period.

Looking further at national averages for November, shredded scrap finished the month at $392 on the spot market, just $16 shy of where the commodity stood in August. No. 1 heavy melting steel (HMS) fetched $354 in November, just $14 shy of its August price, but still $51 per ton below the May 2012 price of $405 per ton.

Regionally, pricing climbed most vigorously in the North Central/East region (consisting of the New England states, Delaware, Kentucky, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, West Virginia, most of Indiana, eastern Virginia and eastern North Carolina), where shredded scrap gained $52 per ton and prompt grades gained $50 per ton.

Although Superstorm Sandy likely is yielding new supplies of ferrous scrap now, during parts of the November buying period, processing activities were disrupted by power outages and transportation was hindered by fuel shortages in part of the North Central/East region.

On the generation side, shredder operators and other processors continue to report slow scrap flows, particularly from the construction and demolition sectors.

Affecting both the demand and supply sides of the ferrous scrap equation, statistics from the steel industry in the United States indicate that other sectors may have limped through the fall of 2012 as well.

Industry analysts and pundits commonly pointed to pre-election unease as affecting the U.S. economy, with business owners and managers waiting to see how election results might affect any number of taxation and investment issues.

In mid-November, the American Iron and Steel Institute (AISI), Washington, D.C., reported that in the month of September 2012, U.S. steel mills shipped 7.23 million net tons of steel, which was a 13.7 percent decrease from the 8.37 million net tons they had shipped in the month of August 2012. The figure also marks a 9 percent decrease from the 7.95 million net tons shipped in September 2011.

“Shipments in September were down 13 percent versus the 2012 monthly average through August and were the lowest monthly shipment total since February 2011,” the AISI reported. “Raw steel capacity utilization in September was 70.4 percent, the lowest monthly total in 2012.”

The downturn comes just before a time of year when it is likely to be followed by some seasonal hiccups, as steelmakers avoid carrying too much year-end inventory while also trying to ensure they have enough scrap on hand in case severe weather affects road and barge transportation.

If a post-election steel industry rebound is to occur, it ideally got off to a bit of a start during the week of the election. In the week ending Nov. 10, 2012, domestic raw steel production was 1.74 million net tons at a capability utilization rate of 70.7 percent. This was down from the 1.81 million tons produced in the week ending Nov. 10, 2011, when the capability utilization rate was 73.0 percent. However, output was up 1.7 percent from the previous week (ending Nov. 3, 2012), when production was 1.71 million tons and the capacity utilization rate was 69.1 percent.

Globally, steel production also tailed off in September, though figures from the WorldSteel Association, Brussels, point to an October rebound. After producing 123.67 million metric tons of steel in September, the world’s steel industry bounced back to produce 126.14 million tons in October.

China accounted for much of that difference by jumping from 57.9 million metric tons of production in September to 59.1 million metric tons in October. Also gaining momentum was Brazil, which went from 2.85 million metric tons of output in September to 3.15 million metric tons in October. U.S. steel output in October was down compared to the month before.

November 2012 Spot Pricing


Total U.S.

North Central/ East North Midwest    South
Prompt Industrial Composite $390 $389 $390 $397
#1 HMS $354 $350 $351 $369
#2 Shredded Scrap $392 $392 $386 $399
#2 Shredded/Change vs. Month Before +$48 +$52 +$50 +$44

Spot buyers paid $40 to $50 more per ton for ferrous scrap in early November, reversing a two-month decline in pricing.

Reported regional aggregated spot market prices per gross ton shown for each commodity are based on all Management Science Associates (MSA), Pittsburgh, Raw Material Data Aggregation Service (RMDAS) participants’ actual order data submitted to and processed by MSA as of the 20th of each respective “buy month,” rounded to the whole integer. A map of RMDAS regions is available at, as is a further explanation of RMDAS methodology and an accompanying disclaimer.

No. 2 shredded scrap is defined as containing 0.17 percent or greater copper content. The prompt industrial composite consists of an average of No. 1 bundles, No. 1 busheling and No. 1 factory bundles. Additional pricing information on each grade can be found at

© 2012 Management Science Associates Inc. All rights reserved RMDAS is a trademark of Management Science Associates Inc.


(Additional information on ferrous scrap, including breaking news and consuming industry reports, can be found at