NEW YORK — The Mid-Atlantic ferrous scrap markets have emerged as the strongest this month as prices in Philadelphia increased for significant obsolete and prime scrap grades.
Strong demand from export docks, relatively tighter supply compared with other regions of the country, and an aggressive buying drive from a recently restarted mill gave the market the impetus it needed to drive prices higher.
No. 1 heavy melt scrap prices jumped to $397 per gross ton, on average, with sources reporting heavy trades anywhere between $10 and $20 per ton higher than April, depending on where mills started early last month. Heavy melt sales were reported for varying volumes at between $390 and $405 per ton, but participants said significant volumes had traded in the higher ranges to bring a $397-per-ton average for May.
"Heavy melt made the biggest jump because the flows have been very weak. People have scrap, but not a lot," a large dealer said.
Among other major obsolete grades, shredded steel and 5-foot plate and structural scrap recorded a $10-per-ton increase to $445 and $435 per ton, respectively.
"Philadelphia was boring this month. The activity was in Maryland. They came out with high prices and volumes. If you got out first, you were OK," one consumer said, referring to the impact on this month’s market of a recently restarted competitor.
While prime grades didn’t enjoy the same bump as the obsolete scrap grades, both No. 1 bundles and No. 1 busheling settled $5 per ton higher at $462 per ton.
"One large consumer was not in the spot market for prime because it decided to only take in contract volumes. That kept primes from rising further," a second dealer said.
A large broker said prime grades should have risen further due to increased participation from the region’s mills and lower industrial activity.
"In the Midwest, automotive is generating a lot of scrap, but there’s not much industrial scrap around the Mid-Atlantic. What is available is tied into contracts, so primes should have gone up more," he said.