Domestic mill buyers of ferrous scrap in the United States were able to make purchases in March at price levels remarkably consistent with those made the month before. Per ton average pricing for all grades in all regions moved by $8 or less from February to March, according to pricing survey data from the Raw Material Data Aggregation Service (RMDAS) that is compiled by Management Science Associates Inc. (MSA), Pittsburgh. (Click here to access prices for the month -- RMDAS March)
Small increases of from $1 to $8 per ton were most common for prompt industrial grades, shredded scrap and No. 1 heavy melting steel (HMS), with only two grades in two separate regions declining (by just $1 per ton in both cases).
Pricing for all ferrous grades across all regions stayed at $400 per ton or higher in the March 2011 buying period, which RMDAS closed out on March 20th.
No. 2 shredded scrap (shred with more than 0.17 percent copper content) maintained a national average price of $452 per ton on the spot market, an increase of just $1 per ton, as prices for the three grades covered in the RMDAS Index moved in fairly close sync across all three RMDAS regions (North Central/East; North Midwest; and South).
Pricing moved the least in the North Midwest region (consisting of Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, Wisconsin and the northwest corner of Indiana), where prompt grades and shredded scrap gained $4 in value while No. 1 HMS was purchased for $1 per ton more, on average.
Many scrap recyclers are reporting a healthy flow of scrap, coupled with enough demand to keep scrap flowing out of their yards as quickly as it comes in.
A Midwestern scrap processor speculates that peddlers and scavengers continue to find scrap to bring in, although they may be travelling farther to find it. “I think people in 2004 got the lowest-hanging fruit—the scrap nearest to the highway,” says the recycler. “By 2008, they had to move some five miles beyond main highways, and now prices are staying good enough that we’re still drawing scrap from even farther away,” he comments. “It’s still there—it’s just people are going further out to get it.”
Industrial production figures are not soaring, but also are not reversing, resulting in some clean production scrap to come in each month.
At the National Demolition Association convention in Las Vegas in March, a panel of demolition contractors reported varying business conditions, with several saying their volume of work has increased since early 2009.
“There seems to be a lot going on right now; we have work on the books,” said Mike Casbon of ERM Inc., who is working on a major project in Texas for the demolition and environmental remediation company.
Tom Robinette of Chicago-based Robinette Demolition Inc. said the Chicago area is “seeing a significant increase in bid requests, which has caused some increase in activity—but others are waiting to pull the trigger,” he says of property owners and developers.
One more regional demolition viewpoint came from Ron Richey of Eugene, Ore-based Staton Companies. “Up in the Northwest, we have a pretty robust demolition market,” he commented, citing work on government facilities and the demolition of obsolete industrial plants, including paper mills. “Overall, there’s some work to be bid and some profit to be had.”
An improvement in weather conditions in March (in many parts of the country) most likely also contributed to better scrap flows, as the number of snow storms and ice storms dropped significantly in March compared to January and February.
Demand from the domestic steel remains stable. The American Iron and Steel Institute reports that in the week ending March 12, 2011, domestic raw steel production was nearly 1.85 million net tons, representing a capability use rate of 75.5 percent. That figure is up1.1 percent from the previous week, when production was slightly less than 1.83 million net tons and the rate of capability use was 74.7 percent. The weekly figure also is 4.4 percent greater than what was produced in the comparable week in 2010.
The AISI also reported that shipments of finished steel in January of 2011 jumped to more than 7.5 million net tons, a 5.9 percent increase from the 7.1 million net tons shipped in the previous month, December 2010.
That January 2011 figure represents a 14.4 percent increase from the less than 6.6 million net tons shipped in January 2010. The group reports that cold rolled sheet shipments were up 19 percent compared to the January 2010 period.
The 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.