For the second consecutive month, shippers of ferrous scrap were able to fetch a few dollars more for their ferrous scrap in the September buying period.
According to pricing survey data of the Raw Material Data Aggregation Service (RMDAS), compiled by Management Science Associates’ (MSA), Pittsburgh, prompt, shredded and No. 1 heavy melting steel (HMS) scrap all gained in value in each of the three regions tracked by RMDAS. To view the chart, click here -- September RMDAS Pricing.
Mill buyers in the North Midwest region (consisting of Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, Wisconsin and the northwest corner of Indiana) witnessed the largest gains in September. Shredded scrap increased by $30 in this region, followed by a $24-per-ton gain for prompt industrial grades (new production scrap consisting of #1 busheling, #1 bundles and #1 factory bundles) and a $23 per ton increase for No. 1 HMS.
Nationally, mills paid an average of $435 per ton for prompt scrap, the most they have paid since June of 2010. Mills paid an average of $370 per ton for shredded scrap, the highest per ton figure since April of 2010.
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| Prices per ton, from 9/09-9/10 -- Source: RMDAS |
Pricing was largely consistent across all three regions. The largest swing was the $25 per ton average price difference between what mill buyers paid for No. 1 HMS in the North Central/East region ($351 per ton) and the South region ($326 per ton).
While the price increases are welcome news for recyclers, several report that their expectations had been for a bigger price increase in September. “These last few weeks have been kind of goofy,” said a recycler in the Midwest in early September. “There were rumors a few weeks ago about $50 to even $80 price increases being possible, but now it looks like only $20.”
The October buying period has reportedly demonstrated an outright absence of purchasing by some steel mills, with recyclers already speculating on just how sharp the per-ton price drop will be for October.
On the supply side, recyclers say levels of incoming flow have been stable as summer turns to fall, with manufacturing and demolition activity remaining lukewarm.
World demand for ferrous scrap was steady to even slightly slower in August compared to July. Figures from the World Steel Association (Worldsteel), Brussels, showed world leader China produced slightly less steel in August than July, as did India—a common destination for containerized ferrous scrap.
Not all national steelmaking receded in August, however. Turkey’s steel production rose from less than 2.4 million metric tons in July to about 2.55 million metric tons in August.
In the European Union, August lived up to its reputation as a “holiday” month, as steelmakers in the EU produced only 12.1 million metric tons of steel in August, compared to 13.9 million tons in July.
Globally, production dropped from 114.8 million metric tons in July 2010 to 112.9 million metric tons in August.
More recent figures from the United States show a slight decline in steel production as summer turns to autumn. According to the American Iron and Steel Institute (AISI), in the week ending September 18, domestic raw steel production was 1.71 million tons. That is down 1.8 percent from the previous week’s figure of 1.74 million tons, according to the AISI.
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 Jeralyn Brown at 724-265-6574 or via e-mail at JBrown@MSA.com.