August Ferrous Scrap Prices Largely Hold Steady

Scrap dealers and traders selling to steel mills on the spot market in early August fetched a few dollars per ton more for shredded and #1 heavy melting steel (HMS) scrap, but not for prompt industrial grades.

According to pricing survey data of the Raw Material Data Aggregation Service (RMDAS), compiled by Management Science Associates’ (MSA), Pittsburgh, mill buyers on average paid $28 per ton more for No. 2 shredded scrap in August compared to July. (click here to view the prices for August)

Prices in the August buying period rose most sharply for shredded scrap in the South, where mills, on average, paid $346 per ton for shredded scrap, up from $316 in the July buying period.

Nationally, the price of shredded scrap crept closer to $350 per ton, averaging $347 in August. Prompt industrial grades (new production scrap consisting of #1 busheling, #1 bundles and #1 factory bundles) fell by $3 per ton nationally, but stayed above $400 at $418 per ton.

Regionally, prompt industrial grades rose slightly in the RMDAS North Midwest region (consisting of Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, Wisconsin and the northwest corner of Indiana) and in the South. But that advance was offset by a $5 per ton decline in the RMDAS North Central/East region.

Recyclers say they continue to see reduced scrap flows, compared to the peaks reached in 2007 and early 2008. A recycler in the Great Lakes region estimates writing an average of 180 scale tickets per day, compared to an average that had hit 300 per day at the market’s peak.

The drop in scrap flows are being attributed to factors ranging from automotive model changeovers to continuing inactivity in the construction and demolition sectors.

Global demand showed signs of slowing that may be seasonal. World crude steel production for the 66 countries reporting to the World Steel Association (Worldsteel), Brussels, was slightly less than 115 million metric tons in July, down from the nearly 119 million metric tons of steel produced in June.

The July 2010 figure is 9.6 percent greater than what the world’s steelmakers produced in July 2009. Year-to-date, global steel production stands at 821 million metric tons, about 25 percent greater than the 657 million metric tons produced in the first seven months of 2009.

China’s crude steel production for July 2010 was 51.7 million metric tons, an increase of 2.2 percent compared to July 2009. As in other nations, however, Chinese steelmakers produced less steel in July 2010 than they did the month before (down from 53.8 million metric tons in June).
 
In the European Union, Germany’s July 2010 crude steel production was 3.5 million metric tons, an increase of 29.7 percent compared to July 2009. As in China, however, German steel production slowed in July 2010 compared to the previous month, when 3.8 million metric tons of crude steel was made.
 
The United States produced 6.7 million metric tons of crude steel in July 2010, a 32.9 percent increase, compared to July of 2009. American steel production also slowed compared to June 2010, when steelmakers churned out 7.2 million metric tons.

Among the only nations that bucked the trend and produced more steel in July compared to June were: India (5.75 million metric tons vs. 5.3 million in June); Russia (5.6 million metric tons vs. 5.4 million in June); and Brazil (2.95 million metric tons vs. 2.8 million in June).

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 e-mail at JBrown@MSA.com.