After several months of stability, ferrous scrap prices received by shippers dropped from $30- to $45-per-ton in the November buying period.
Spot market figures collected through the Raw Material Data Aggregation Service (RMDAS) of Management Science Associates (MSA), Pittsburgh, show domestic steel mills paying from $30 to $45 less per ton for their scrap over the first 20 days of November. (click here to view prices for the month)
The RMDAS Prompt Industrial composite grade (consisting of No. 1 busheling, No. 1 bundles and No. 1 factory bundles) dropped below $500 per ton for the first time since May of 2011, falling from $500 per ton in October to $455 per ton in November.
Mill buyers also were able to pay, on average, $30 per ton less for shredded scrap and $29 per ton less for No. 1 heavy melting steel (HMS) scrap in November compared to the month before. Spot buyers in the South region paid, on average, slightly higher prices for scrap than did buyers in the other RMDAS regions.
In the South, mill buyers paid $5 per ton more for prompt grades compared to buyers in the North Midwest. The average spot buying price for No. 2 shredded scrap in the South was $3 per ton more than the national average and $13 more per ton than in the North Midwest. No. 1 HMS scrap in the South fetched $19 more per ton than what was paid in the North Midwest region.
A California scrap recycler reported that early November buying prices being offered by export brokers were well off the October prices, with buyers in some cases asking for $60 less per ton.
A scrap recycler based in the Midwestern United States said the lower ferrous prices, in combination with copper prices that had dropped earlier in the fall, would likely slow down inbound flows to scrap yards. Some generators who follow pricing patterns, this recycler predicted, will be counting on weather interruptions and declining mill inventory positions to eventually work in tandem to create stronger ferrous prices in the winter months.
On the demand side, Chinese government ministers and university professors who spoke at two industry conferences in November portrayed a strong continuing demand scenario for scrap metal in China.
For the second consecutive year, China’s Twelfth Five-Year Plan, which begins in 2012, was a focus of comments from several government ministers who addressed the Secondary Metals International Forum, organized by the China Nonferrous Metals Industry Association Recycling Metal Branch (CMRA). The conference was in early November in Guangzhou, China.
Speaker Li Xinmin of China’s Ministry of Environmental Protection (MEP), said Chinese president Hu Jintao has set as national priorities to “reduce pollution from the source and develop the circular economy,” a point of view that may ultimately work in favor of scrap-fed electric arc furnace (EAF) steelmaking technology.
In a presentation at the World Recycling Forum, held in Hong Kong in mid-November, Professor Weng Duan of Tsinghua University, Beijing, offered several statistical reasons why China has become the epicenter of the global scrap industry.
In 2010, China overtook Japan to become the world’s second largest national economy, said Weng, and in 2009 it became the world’s largest producer of automobiles, overtaking the United States. Statistics Weng offered for 2010 showed China produced some 18 million automobiles, 80 million refrigerators, 60 million washing machines and 110 million color television sets.
The figures for such items discarded or scrapped each year is low in three of those categories, according to Weng, as new, urban households continue to form: some 2.7 million vehicles, 4 million refrigerators and 6 million washing machines were scrapped in 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., 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.