Industrial scrap prices log heftier drop than expected in Nov.

Nov 09, 2009 | 12:02 PM | Michael Marley

Prices paid for industrial steel scrap have dropped as much as $50 per long ton this month, leading the expected decline in ferrous prices in several of the major northern industrial cities.

That decline outpaced the slide in shredded scrap, down about $25 to $30 per ton, and cut ferrous grades like No. 1 heavy melt and five-foot plate and structural scrap, both of which dropped by about $20 per ton in several regions.

Some dealers said they believe the mills pushed the prices down too far this month because both dealers and mill buyers know they're unlikely to buy any scrap next month. Traditionally, steel mills don't buy much scrap or other raw materials at year's end to avoid carrying that inventory on the books at the end of their fiscal year.

But one Pennsylvania-based mill buyer said he has seen little or no problem getting what scrap he needed this month, as well as what he estimated he would need for a reduced melt program in December, when his mill and others will be closed in part for the Christmas holidays. Dealers were anxious to unload as much of their inventories as possible and not be left out of the market this month when the mills had filled their buying quotas, he said.....