Prime scrap flows take pressure off shredded

Oct 01, 2012 | 03:19 PM | Sean Davidson

Tags  ferrous scrap, shredded scrap, busheling, prime scrap, Sean Davidson

MUNICH — Weak demand from U.S. steel mills is not likely to offer any major support to shredded scrap prices despite reports of supply tightness, according to market participants.

Strong flows of prime scrap, particularly No. 1 busheling, throughout the year have allowed many mills to increase their intake of busheling during the past few months, sources said. Increased busheling in each melt will continue as long as busheling and shredded scrap prices remain on par within $5 to $10 per gross ton of each other, they added.

Buyers at some mills confirmed the trend, but many said not every steel mill is structured to take advantage of such anomalies.

"Some mills have the ability and do change their melt practice to optimize on grades that have higher yields and are lower-priced. It’s always about value in use. I’ve actually increased the percentage of busheling in our charge the past three months because it’s been a good value," said a buyer at one mill. "Depending on the type of busheling, the density may not be as good as shred, however."....