In the ferrous scrap market, early November played out like October, as prompt industrial grades joined other ferrous scrap grades by dropping below $300 per ton in value, according to transaction pricing compiled by Management Science Associates Inc. (MSA) for its Raw Material Data Aggregation Service (RMDAS)
Steel mill buyers of prompt grades on the spot market at that time were paying $276 per ton on average, down by $40 per ton compared to the $316 average price paid in October.
The November buying period marked the second consecutive month of RMDAS prices moving down in the United States, countering an upward pricing trend that had run through July, August and September.
Recyclers are reporting that the trend is likely to flip back to pricing gains in December. From mid-November on, strong export buying for both bulk loads to Turkey and container shipments to India have bid prices back up.
Prompt industrial grades joined other ferrous scrap grades in early November by dropping below $300 per ton in value, according to transaction pricing compiled by Management Science Associates Inc. (MSA) for its Raw Material Data Aggregation Service (RMDAS).
Steel mill buyers of prompt grades on the sport market paid $276 per ton on average, down by $40 per ton compared to the $316 average price paid in October.
November marked the second consecutive month of RMDAS prices moving down in the United States, countering an upward pricing trend that had run through July, August and September.
Recyclers are reporting that the trend is likely to flip back to pricing gains in November. From mid-November on, strong export buying for both bulk loads to Turkey and container shipments to India have bid prices back up.
In early November, pricing for all grades in all regions moved downward in the November buying period, with the North Central/East region (defined by RMDAS as the New England states plus, New York, New Jersey, Ohio, Pennsylvania, Kentucky, Maryland, eastern Virginia, West Virginia, most of Indiana and most of Michigan) experience some of the sharpest drops.
Mill buying prices dropped nearly in concert among the three grades for which RMDAS releases figures—the Prompt Industrial Composite, No. 2 Shredded Scrap and No. 1 Heavy Melting Steel (HMS).
As in October, prompt grades retained their $40 spread in value compared to shredded scrap, while shredded scrap remained about $20 per ton more valuable than No. 1 HMS.
On the supply side, a recycler in the Upper Midwest says scrap flows remain light, with industrial scrap generation termed “absolutely dead” and the obsolete and demolition side also slow. He characterized his demolition and construction contractor customer base as living “hand to mouth” with very few projects booked for the future.
Although a slump in export demand was considered a culprit in October, global steelmaking figures show that most nations continued to produce steel at healthy levels in that month. That has been reflected by the new surge in buying in late November.
In the United States, domestic production continues to edge higher—though slowly. Steel producers in the United States, according to the American Iron and Steel Institute (AISI), produced more than 1.55 tons of raw steel in the week ending Nov. 14. This was up from just 1.54 million tons the week before, marking a mere 0.9 percent gain.
The Upper Midwest recycler adds, though, that “mills are not buying their winter pile; that’s curious.” He continues, “Even though prices were down and bargains for the mills, they still placed limited orders.”
Recyclers are trying to determine whether steel mills in North America are keeping their inventories low for year-end accounting reasons or whether they’re also unsure of upcoming finished product orders for the first quarter of 2010.
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.