RMDAS ferrous benchmark grades all under $400 per ton

Ferrous scrap generators and processors who are waiting for the commodity to regain value instead saw prices move lower in late May and the first three weeks of June.

Mill transaction pricing gathered by the Raw Material Data Aggregation Service (RMDAS) of Pittsburgh-based MSA Inc. showed mills in the United States paid on average less than $400 per ton for its three large benchmark grades from May 21 to June 20.

The holdout prompt industrial composite grade (consisting of new production scrap such as No. 1 busheling, No. 1 bundles and No. 1 factory bundles) slipped to having a $399 per ton national average in the 30-day period just completed.

The $399 per ton price is down by $36 from the prior buying period. The other two RMDAS benchmark grades also fell in late May and early June, with No. 2 shredded scrap falling by $19 per ton and No. 1 heavy melting steel (HMS) dropped by $14 per ton nationally.

Scrap values in the RMDAS South region (Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, Texas and parts of North Carolina and Virginia) have retained their value by a margin of $2 to $44 per ton compared with average prices across most grades in the North Central/East and North Midwest regions.

The biggest regional difference currently involves the $344 per ton value for No. 1 HMS scrap in the South. That figure is $44 per ton higher than what the grade is trading for in the North Midwest and $31 per ton higher than mills are paying in the North Central/East region.

Export markets, according to Davis Index and other metals information services, remain relatively quiet and reluctant to increase their bids for American ferrous scrap.

This week, Davis Index has reported that prices being paid for containerized ferrous shipments off the East Coast of the U.S. have softened by $5 per metric ton. Turkish buyers are not raising their prices for scrap, while buyers in India and Bangladesh are among those seeking slight reductions.

In the domestic steelmaking sector, year-to-date production through June 15 of nearly 40.5 million tons is down by 2.8 percent compared with the 41.6 million tons produced in the same time frame last year, according to the Washington-based American Iron and Steel Institute (AISI).

In the second full week of June, according to AISI, the 1.7 million tons of steel produced in the U.S. was down 0.7 percent from what was made in the previous week and down by 2.0 percent compared with the weekly total one year earlier.

Mills in the U.S. are operating at a 76.7 percent capability utilization (capacity) rate currently, down from a 77.3 percent capacity rate a year ago.