RMDAS pricing portrays drop in prompt grades in the South

United States ferrous scrap pricing tracked by Pittsburgh-based MSA Inc. through its Raw Material Aggregation Data Service (RMDAS) displayed a regional quirk in August 2016 with the price for prompt grades dropping sharply in the RMDAS South region.

While prompt grades dropped by $13 per ton in the RMDAS North Midwest region and just $10 per ton in its North Central/East region, the prompt industrial composite grade in the South fell by $30 per ton.

The grade also was an outlier within the South region, where the RMDAS No. 2 shredded scrap grade fell by just $4 per ton and the No. 1 heavy melting steel (HMS) grade dropped by $7 per ton.

The drop may be more of a reflection of the scarcity of obsolete scrap in the South, resulting in less scrap for shredder operators and processors who prepare No. 1 HMS. One recycler based in the Southeast tells Recycling Today obsolete scrap flows are down by as much as 25 percent in 2016 compared with 2015, helping to prop up prices for the shredded and HMS grades.

The generation of prompt grades, meanwhile, has been more stable, meaning a decline in demand can quickly result in lower bids made by buyers.

With the August drop in prompt grades in the South, buyers in that region are now paying on average from $11 to $18 per ton less for prompt scrap compared with buyers in the rest of the country.

The RMDAS South region includes Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, North Carolina, Tennessee, Texas, South Carolina and part of Virginia.