Shredded scrap prices offer mills best values

Jun 05, 2014 | 06:25 PM | Sean Davidson

Tags  ferrous scrap, shredded scrap, scrap prices, Chicago, Indiana, Alabama, Philadelphia, Detroit heavly melt

NEW YORK — Price differentials between heavy melt, plate and structural, and shredded scrap are poised to break free from historical spreads based on recovery values as another month of weaker shredded scrap prices has brought cut grades near—or on par with—shred in several regions.

In a few local markets, 5-foot plate and structural scrap has traded as high as $15 per gross ton over shredded scrap, according to some market participants.

The tight price spreads between better-quality shredded scrap and heavy melt helped prop up shredded values, with some June 5 trades reported at down $10 per ton after early shredded sales for June were reported the previous day at down $20 per ton.

Some suppliers called it a sign of a firming market that might not have been as abundant on shredded scrap supply as previously believed. Others said the late strengthening in shredded prices was more reflective of a move by mill buyers to secure the better-value grade compared with prevailing prices for heavy melt and No. 1 busheling scrap.....

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