November RMDAS Figures Show Ferrous Scrap Still Sliding

The drop in prices being paid by North American steel mills for ferrous scrap has continued in November, with scrap now trading at between $113 and $167 per ton. (Click here to view November figures)

In early November, buyers paid roughly from $60 to $110 per ton less for scrap than they did in October, according to transaction pricing compiled by Management Science Associates Inc. (MSA) for its Raw Material Data Aggregation Service (RMDAS).

Nationally, the average spot buyer of No. 2 shredded scrap paid $160 per ton, $5 per ton more than the $155 per ton paid by the average buyer of prompt ferrous scrap (consisting of #1 busheling, No. 1 bundles and No. 1 factory bundles).

In both the North Central/East and the South regions, mills paid more for shredded scrap on average than they did for prompt grades. Bucking the trend was the North Midwest market region (Illinois, northwestern Indiana, Wisconsin, Minnesota, Iowa, Missouri, Kansas, Nebraska and the Dakotas), where prompt grades fetched $164 per ton compared to just $146 per ton for No. 2 shredded scrap.

Number 1 Heavy Melting Scrap (HMS) remained several dollars lower in value than the other grades and also continued to lose value in November.

In the November buying period measured by RMDAS, No. 1 HMS traded at $119 on average nationally, with buyers in the North Midwest paying just $113 per ton.

In the global scrap market, reduced demand from steelmakers throughout the world remained the key factor in the dramatic change in ferrous scrap pricing in the past 90 days.

The World Steel Association (formerly the IISI), Brussels, compiled figures that show China producing 3.5 million fewer metric tons of steel in October compared to September and 7.5 million metric tons less steel (17 percent less) compared to October of 2007.

China was not alone in slowing down its furnaces, as steel production also dropped in the United States, Russia, Germany, Brazil and Turkey in October compared to the month before.

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 Ralph Pinkert at 773-588-1199 or via e-mail at RPinkert@MSA.com.