American Metal Market has completed the second assessment of its expanded Chicago methodology, which includes the addition of three Indiana steel mills and one Iowa mill.
The differentials between the "Chicago - expanded" and "Chicago - historical" footprints are listed below and can be viewed in this table:
No. 1 and No. 2 heavy melt: Unchanged in either area this month. The spread remains $5 per gross ton.
No. 1 bundles: Unchanged in either area. The spread remains $5 per gross ton.
No. 1 busheling: Unchanged in either area. The spread remains $10 per gross ton.
Shredded scrap: The spread on this grade widened to $15 per ton under the expanded Chicago footprint, up from $10 in January settlements, as prices outside of the historic Chicago region are averaging $340 per ton.
Machine shop turnings: Unchanged in either area. The spread remains $15 per gross ton.
Cut structural/plate, 5 ft max: Unchanged in either area. Prices remain the same in both areas.
Recognizing that contracts need to be adjusted, American Metal Market will continue to publish, for a period of six months through June 30, 2018, two sets of prices: "Chicago - expanded footprint“ and "Chicago - historical footprint."
Effective July 1, 2018, the words "historical" and "expanded" will be removed and "Chicago - expanded" will permanently replace "Chicago - historical." The price will be noted as "Chicago," with the additional mills included in the price assessment.
Also effective July 1, 2018: For contracts that are not adjusted during the six-month period when two sets of prices are posted, a non-market adjustment notice specifying the change in prices from the expansion will be issued for Chicago. This index will specify that the non-market adjustment is between the two indexes and not a monthly price move.
If you have any questions or comments about the proposed change, please contact Thorsten Schier at firstname.lastname@example.org.