Repeat Pattern

Departments - Ferrous

Market watchers will have to determine whether a 12 percent decline in steel output in the European Union in August was primarily seasonal or a bellwether of troubles in the European economy.

Subscribe
October 21, 2011


(Per gross ton for No. 2 shredded scrap, defined as 0.17 percent or greater copper content)


September prices for spot ferrous scrap purchases looked a lot like those of the previous six months. In late September, however, recyclers began anticipating a drop in scrap prices to mirror flat-to-declining prices for finished steel and dropping prices for copper and some other traded metals.

Spot buyers in early and mid-September paid within $7 per ton of what they paid in August for all grades of ferrous scrap across all regions, according to the Raw Material Data Aggregation Service (RMDAS) of Management Science Associates (MSA), Pittsburgh.

National averages barely moved at all, with No. 1 heavy melting steel (HMS) remaining at $416 per ton for the third consecutive month. The RMDAS prompt industrial composite grade (consisting of No. 1 busheling, No. 1 bundles and No. 1 factory bundles) increased just $1 per ton, and No. 2 shredded scrap moved up $4 per ton after declining $4 in August.

Regional differences were minimal, with one of the wider differences being that mills in the North Midwest region (Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, Wisconsin, the Dakotas and northwest Indiana) were able to pay $12 to $13 per ton less for No. 1 HMS compared with buyers in the other two RMDAS regions.

On the supply side, a scrap recycler in the South says material flows have remained steady on both the obsolete and industrial scrap fronts.

Among the topics of discussion at the Arkansas Recycling Coalition Annual Conference in September was the amount of large obsolete scrap left in rural areas in that state. Attendees from different counties offered differing viewpoints, with one reporting that large pieces of rusty equipment in fields and next to barns remained an eyesore.

Larry Karigan-Winter of the Madison County (Ark.) Solid Waste & Recycling Center, Huntsville, Ark., said his department had been actively seeking out such scrap and had been helping county residents "harvest" it for recycling purposes.

An attendee from Tri-State Iron & Metal, Texarkana, Ark., commented that many of the remaining rusty combines or tractors still visible along rural highways were being held onto by people who still either harvested parts from the machines or thought that someday yet they may need to use them.

Steel output in the United States has remained stable, according to the American Iron and Steel Institute (AISI).

In the week ending Sept. 17, 2011, raw steel production in the U.S. was 1.88 million tons, and mills operated at a 77 percent capacity rate. That figure represents a 10.9 percent increase from the same period in 2010 and is up 0.8 percent from the previous week in 2011.

In the U.S., demand for flat-rolled steel has dropped, according to Steel Dynamics Inc., Fort Wayne, Ind., and attempts to secure higher pricing for flat-rolled steel have been unsuccessful, according to Metal Bulletin.

The website www.steelprices-china.com reports prices for long products in China have dropped by more than 2 percent in that nation in September, but such price drops are not occurring throughout the world. A decline in steel exports from China was cited as one of the reasons for the price drop.

In the month of August, the world's steelmakers produced less steel than they did in July, according to the Brussels-based World Steel Association (Worldsteel, www.Worldsteel.org). Global output dropped from 127.5 million metric tons in July to 124.6 million metric tons in August, a decline of 2.3 percent.

China's steel industry represented part of the decline world steelmakers felt, with its output falling by about 550,000 metric tons, or about 1 percent.

Market watchers will have to determine whether a sudden decline in output in the European Union was primarily seasonal or a bellwether of troubles in the European economy. August steel output dropped by more than 1.8 million metric tons, or by more than 12 percent, according to Worldsteel.

The United States experienced no such seasonal drop in August, with output actually climbing from 7.45 million metric tons in July to 7.53 million metric tons in August.

September 2011 Spot Pricing

  Total U.S. North Central/ East North Midwest  South
Prompt Industrial Composite $505 $505 $499 $503
#1 HMS $416 $419 $406 $418
#2 Shredded Scrap $451 $451 $442 $454
#2 Shredded/Change vs. Month Before +$4 +$2 +$2 +$1

Spot market scrap prices remained stable for the sixth consecutive month, with shredded scrap pricing within $1 per ton of its March 2011 price.

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 http://rmdas.msa.com, 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 www.RecyclingToday.com.

© 2011 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
www.RecyclingToday.com.)