Processors and shippers of ferrous scrap enjoyed another month of gains in value in September, as mills paid an average of from $15 to $20 more per ton on the spot market.
As indicated by transaction pricing compiled by Management Science Associates Inc. (MSA) for its Raw Material Data Aggregation Service (RMDAS), mills paid an average of $339 per ton for prompt industrial scrap on the spot market, an increase of $21 compared to the $318 per ton paid in August.
Prices were up comparably for shredded scrap and number 1 heavy melting steel, with pricing showing across-the-board gains for all grades in all regions. The upward price movement continues a three-month trend that started in July.
There were few observable differences regionally in buying and selling behavior as average pricing moved upward from $15 to $24 for across all grades in all three regions.
The biggest single gainer was the $24 per ton more paid for prompt grades in the RMDAS South region, which consists of mills in Alabama, Arkansas, the Carolinas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, Tennessee, Texas and western Virginia.
The prompt grades U.S. average pricing of $339 per ton paid by mills in September is more than double the $167 per ton that mills were paying in April of 2009.
While American manufacturing and steelmaking activity remains sluggish, the rest of the world continues to place significant orders for ferrous scrap. Steelmakers in China remain the most active, with that nation having produced 52.3 million metric tons in August.
The figure represents close to half of the global total, according to statistics compiled from 66 nations by the World Steel Association (Worldsteel), Brussels.
The August total for steelmaking in China increased by more than 2.5 million metric tons compared to July production. Crude steel production for the 66 countries reporting to Worldsteel continues to fall below year-ago monthly comparisons, although that is likely to change in either September or almost certainly October of 2009.
In September of 2008, 107.9 million metric tons of steel were made, a figure that could be equaled next month, while in October of 2008, 98.8 million metric tons of steel was produced globally.
The 106.5 million metric tons produced in August 2009 equates to 5.5 percent less steel than was made globally in August of 2008.
This August, some of the nations that have seen the biggest plummets in production showed a little bit of renewal. In the United States, 5.2 million metric tons of steel was made compared to 5.0 million in July. South Korean steelmakers produced 4.2 million tons of steel in August compared to 4.0 million in July.
In the European Union (EU), however, production scaled back in August, with the EU 27 producing a combined 10.7 million tons of steel in August compared to 11.2 million tons in July.
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.
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