steel scrap pile
The price of No. 1 heavy melting steel suffered the steepest drop in May.
Photo by Recycling Today staff.

RMDAS transactions portray May ferrous plunge

Domestic steel mills paid from $65 to $85 less per ton, depending on the grade and region.

May 24, 2022

Steel mill buyers of ferrous scrap in the United States were able to buy material for less in May compared with the high-priced April market, as revealed by transaction pricing collected by the Raw Material Data Aggregation Service (RMDAS) of Pittsburgh-based Management Science Associates Inc. (MSA).

Of the three largest grades tracked by RMDAS, No. 1 heavy melting steel (HMS), suffered the steepest drop. The national average price paid for No. 1 HMS by mills between April 20 and May 19 was $443 per ton. That means the grade lost 15.8 percent of its value during the trading period.

By suffering the steepest drop of the three major grades in May, No. 1 HMS now is priced significantly lower than both No. 2 shredded scrap and, especially, the RMDAS prompt industrial composite grade. Nationally, mills paid $87 per ton more for shred ($526 per ton) than for No. 1 HMS and a whopping $268 more per ton for prompt scrap ($711 per ton).

Regional differences paid for prompt scrap were minor, with the North Midwest and North Central/East regions paying $710 per ton while the RMDAS South region paid $713 per ton.

There was a little more variation with No. 1 HMS prices, with mills in the South paying $451 per ton and the North Central/East region paying $448 per ton. Meanwhile, mills in the North Midwest region were able to buy the grade for just $424 per ton.

Davis Index, which tracks ferrous scrap transactions around the world, including export purchases, reported earlier in May on the unwillingness of overseas buyers to offer April U.S. prices to American exporters.

In the early part of May, as domestic prices are being established in the U.S., Davis Index reported that mills in Turkey remained largely absent from the market, or they offered prices of at least $30 per ton compared with April pricing.

Turkey is the largest buyer of exported U.S. ferrous scrap.