RMDAS tracking shows $40 ferrous price drops in May

Recycled steel mill purchasing transaction figures collected by the Raw Material Data Aggregation Service (RMDAS) of Pittsburgh-based MSA Inc. spell out the loss in value the secondary commodity has experienced this month.

In the buying period from April 21 to May 20, three benchmark recycled steel grades in the three RMDAS geographic regions sold from $30-$50 per ton less compared with the previous 30-day period.

Recycled steel values as measured by RMDAS temporarily peaked this March and have fallen back by from $54 to $94 per ton in the past 60 days, depending on the grade and region.

Taking the heaviest fall in value has been No. 2 shredded steel scrap in the North Midwest region, which reached $469 per ton in the March buying period but by late May had fallen to $375 per ton.

The type of recycled steel doing the best job clinging to its value has been the RMDAS prompt industrial composite grade in its North Central/East region. Mills there that had been paying $499 per ton in March for prompt busheling and bundles paid an average of $445 in May, representing a $54 drop in price.

During late April and May, mills in the United States on average paid $439 per ton for prompt scrap, $378 for No. 2 shredded scrap and $332 per ton for the No. 1 heavy melting steel (HMS) grade, according to RMDAS.

Writing for a Bureau of International Recycling (BIR) World Mirror publication distributed May 10, George Adams of California-based SA Recycling says in part, “While there appears to be no imminent reason for recycled steel prices to rally, dealers are aware that the heat of summer, coupled with two months of falling prices, will slow recycled steel flows.”

Adams notes that by early May, the Phoenix region already was experiencing “consecutive days with temperatures above 100 degrees Fahrenheit,” and says recycled steel flows in some cases “were off 50 percent in those regions.”

Also writing for the World Mirror, Michael Gaylard, who works from California for Australia-based Sims Ltd., describes an export market that has been diminished by a frenzied pace of Chinese steelmaking on one hand and the presence of exported Russian billet on the other. Those conditions have lessened the appetite for imported scrap in nations including Malaysia, South Korea, Taiwan and Vietnam, says Gaylard.

Offering better news is the Indian subcontinent, according to the trader.

“Bangladesh continues to see steady demand for recycled steel imports, maintaining the upward trajectory seen in recent years,” Gaylard writes for the Brussels-based BIR.

“India’s steel industry saw relatively steady domestic demand in this year’s first quarter,” although, “recycled steel imports dropped by 16 percent, reflecting the continued priority placed on local recycled steel and sponge iron,” also known as hot briquetted iron.