Home News Ferrous Scrap Pricing Drifts Downward

Ferrous Scrap Pricing Drifts Downward

Ferrous

September spot mill buyers get scrap for an average of $10 to $12 less per ton, according to RMDAS.

Recycling Today Staff September 20, 2012

After ferrous scrap processors received a healthy price boosts in August, many had anticipated further strengthening in the market during the September buying period.

Unfortunately for them, according to the monthly averages issued by the Raw Material Data Aggregation Service (RMDAS) of Pittsburgh-based Management Science Associates (MSA), ferrous scrap shippers received anywhere from $4 to $34 less per ton on the spot market in early September. (Click here to view monthly figures.)

There were considerable regional disparities in price movements in September, with prices in the RMDAS South region (consisting of Alabama, Arkansas, the Carolinas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, Tennessee, Texas and western Virginia) actually rising $1 per ton for shredded scrap and losing just $4 per ton for No. 1 heavy melting steel (HMS).

In all regions, including the South, the RMDAS prompt industrial composite (consisting of No. 1 busheling, No. 1 bundles and No. 1 factory bundles) grade lost value in September compared with August, with a $19 average national price drop.

Pricing in the North Midwest region (consisting of Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, Wisconsin, the Dakotas and the northwest corner of Indiana) experienced some quirky behavior in September, with shredded scrap falling $34 per ton there. While shredded scrap there fetched the highest price of the three regions in August, it plummeted to the lowest per ton price in September.

Nationally, per ton prices for shredded scrap were higher than for prompt grades, creating an anomaly that was the subject of discussion at the Institute of Scrap Recycling Industries Inc. (ISRI) Commodities Roundtable Forum in Chicago in September.

When asked about the narrow price difference between prime grades of ferrous scrap and shredded and heavy melting scrap (HMS) grades that had already been experienced in the summer of 2012, panelists at the Ferrous Roundtable pointed to melt shop preferences.

Even though prime grades may have been tempting, EAF melt shop managers “tend to not like change” said Fred Hauptstueck of Steel Dynamics Inc. (www.steeldynamics.com), Fort Wayne, Ind., so they have continued to buy shred.

John Keyes, a district trading vice president with Tube City IMS, Glassport, Pa., agreed with that assessment, noting that buyers from integrated mills with more flexibility in their feedstock “were the winners” during that timeframe, when “big, heavy square things were on sale.”

The Raw Material Data Aggregation Service (RMDAS) Ferrous Scrap Price Index is based on data gathered from a statistically significant compilation of verified ferrous scrap purchase transactions.

RMDAS is a service of Management Science Associates Inc. (MSA), Pittsburgh. Those seeking more information about RMDAS can contact MSA’s Jeralyn Brown at 724-265-6574 or via email at JBrown@MSA.com.
 

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