Ferrous Market Solid through Mid-September

September prices for spot ferrous scrap purchases looked a lot like those of the previous six months. In late September, however, recyclers began anticipating a drop in scrap prices to mirror flat-to-declining prices for finished steel and dropping prices for copper and some other traded metals. (To view September prices, click here.)

Spot buyers in early and mid-September paid within $7 per ton of what they paid in August for all grades of ferrous scrap across all regions, according to the Raw Material Data Aggregation Service (RMDAS) of Management Science Associates (MSA), Pittsburgh.

National averages barely moved, with No. 1 Heavy Melting Steel (HMS) remaining at $416 per ton for the third consecutive month. The RMDAS Prompt Industrial Composite grade (consisting of No. 1 busheling, No. 1 bundles and No. 1 factory bundles) increased just $1 per ton, and No. 2 Shredded Scrap moved up $4 per ton after declining $4 in August.

Regional differences were minimal, with one of the wider differences being that mills in the North Midwest region (Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, Wisconsin, the Dakotas and northwest Indiana) were able to pay $12 to $13 per ton less for No. 1 HMS compared to buyers in the other two RMDAS regions.

On the supply side, a scrap recycler in the South says material flows have remained steady on both the obsolete and industrial scrap fronts.

Steel output in the United States has remained stable, according to the American Iron and Steel Institute (AISI).

In the week ending September 17, 2011, U.S. raw steel production was 1.88 million tons and mills operated at a 77 percent capacity rate. That figure represents a 10.9 percent increase from the same period in 2010 and is an increase of 0.8 percent from the previous week in 2011.
 
The Website www.steelprices-china.com reports prices for long products have dropped by more than 2 percent in China, but such price drops are not occurring throughout the world. A decline in steel exports was cited as one of the reasons for the price drop.

In the United States, demand for flat-rolled steel has dropped, according to Steel Dynamics Inc., Fort Wayne, Ind., and attempts to secure higher pricing for flat-rolled steel have been unsuccessful, according to Metal Bulletin.

Among the topics of discussion at the Arkansas Recycling Coalition Annual Conference in September was the amount of large obsolete scrap left in rural areas of that state. Attendees from different Arkansas counties offered differing viewpoints, with one reporting that large pieces of rusty equipment in fields and next to barns remained an eyesore.

Larry Karigan-Winter of the Madison County (Ark.) Solid Waste & Recycling Center, Huntsville, Ark., says his department has been actively seeking out such scrap and has been helping county residents “harvest” it for recycling purposes.

An attendee from Tri-State Iron & Metal, Texarkana, Ark., commented that many of the remaining rusty combines or tractors still visible along rural highways are being held onto by people who still either harvest parts from the machines or think that someday they may need to use them.

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.