NEW YORK Ferrous scrap
prices in Philadelphia recorded smaller drops than Midwest
markets as increased competition between steel mills and a
robust export market kept a floor under April scrap tags.
No. 1 heavy melting steel scrap
moved to $382 per gross ton this month, down just $6 from March
levels, while No. 1 busheling and bundles shed $13 to settle at
$457 per ton for April sales. Shredded steel scrap prices also
bucked country-wide trends, dropping just $5 to trade at $435
The $5- to $13-per-ton drops
seen in Philadelphia scrap prices were less severe than the
$10- to $20-per-ton declines recorded across other regional
markets. In Chicago, shredded scrap fell $10 per ton this
month, while prime grades declined $15 per ton (AMM,
April 6); in Detroit, mill buyers had even more success,
pushing prime tags down $20 per ton and obsolete grades down
$10 per ton (AMM, April 4).
Low dealer inventories brought
on by high export sales and the re-entry of a large mill
prevented scrap prices in Philadelphia from mirroring national
trends, sources said.
"Philadelphia prices could have
dropped more if there was more inventory on the ground. One
mill is paying higher prices for scrap as it seeks to win back
market confidence, and export docks havent really dropped
their prices either," one broker said.
The return of one large mill, in
particular, has helped prevent other Philadelphia-region buyers
from chasing lower tags, sources said.
"Heavy melt prices didnt
drop as much because the mill came out paying much higher than
anticipated, and another mill followed with strong prices. So
we had to chase it," a buyer at a large mill said.
Given the tightness of the
market, buyers said they were surprised at their success at
achieving drops of even $5 and $6 per ton on heavy melt and
"It has been a strange week," a
second mill buyer said. "I have no idea whats going on.
We thought it would be sideways and perhaps down a bit on
primes, but then obsoletes went down. The amount it went down
A second broker also expressed
surprise over the drop in obsolete scrap prices this month.
"There is not a lot of scrap out
there. I dont know why some mills were trying to push
prices down at all. Exporters need scrap, and theres no
extra scrap coming in the spring cleanup," he said.
Plate and structural scrap was
the only obsolete material to drop significantly this month as
a handful of demolition jobs have started in close proximity to
one large mill, with prices dropping $12 per ton to $423 for
April, sources said.
"Plate and structural scrap
dropped a lot more because one mill is benefitting from the
demo jobs going on around it and another mill did not buy any
plate and structural scrap this month," another source
A source at the nearby mill
confirmed he was benefitting from the windfall of scrap, noting
he had managed to negotiate prices down as much as $16 per ton.
"There are lots of demo jobs around us. It doesnt happen
every day, so we get to take advantage of it," he said.