Ferrous scrap market plummets in Detroit

Oct 04, 2012 | 05:50 PM | Sean Davidson

Tags  ferrous scrap, shredded, prime grades, obsolete grades, Sean Davidson

NEW YORK — Steel mills in Detroit hit the ground running Thursday and within a few hours of trading sent ferrous scrap prices down between $60 and $65 per gross ton for October deliveries.

Shredded scrap was the worst hit in the Detroit region as mill buyers pushed prices down $65 per ton from previous levels, compared with $60 declines for other obsolete and prime grades.

Although demand in the greater Midwest region is expected to be generally weak this month, market participants said demand from those mills without planned outages remained largely steady, with a slight uptick in scrap demand reported at at least one mill.

"Though Detroit’s settled prices on obsoletes are weaker than the numbers we’ve heard from surrounding Midwest markets, I think buyers could have aimed lower but didn’t because they are concerned about hurting flows. I think many have realized they pushed prices down too much too fast," one source said, noting that some mills may even have seen it as a buying opportunity ahead of traditionally stronger winter pricing.....