RMDAS Ferrous Pricing Soars Well Beyond $300

The cost of ferrous scrap has been reaching unprecedented heights in March, as mills have had to pay above $300 per ton, on average, for nearly every grade in nearly every market region in the United States. (to view the a larger version of the chart click on the link -- March Chart)

Figures compiled by the Raw Material Data Aggregation Service (RMDAS) of Management Science Associates Inc. (MSA), Pittsburgh, showed average pricing ranging from a low of $299 per ton for #1 HMS in the South to $371 per ton for prompt industrial scrap in the North Central/East region.(To view the figures for March click on the following link -- RMDAS March Pricing)

Shredded scrap has been fetching from $352 to $357 on average for shippers of that material, marking a jump of from $58 to $82 per ton, depending on the market region. The RMDAS pricing that is published is for what MSA defines as #2 shredded scrap, which contains more than .17 percent copper content.

The leap in shredded scrap pricing is reflective of the overall March pricing trend, which is upward by significant dollar amounts.

It marks the fourth straight month of ferrous scrap price increases, with each of the three grades tracked by RMDAS index having risen to the following extents, as measured by their United States spot pricing averages: #1 HMS from #204 per ton in November of 2006 to $311 per ton this March; #2 Shredded Scrap from $226 per ton in November to $356 in March; and the Prompt Industrial Composite grade moving from $231 in November to $371 in March.

The March price hikes almost certainly reflect a combination of both strong demand coupled with decreased supply, especially pertaining to scrap generation in the United States, where icy and wet weather conditions in many parts of the country slowed down the collection and transportation of scrap shipments in late February and early March.

On the demand side, figures compiled by the International Iron and Steel Institute show a global steelmaking pace for February 2007 that was some 8.6 percent higher than for February of 2006. Global production in February 2007 was actually down, however, compared to total output from 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.