NEW YORK Aggressive
pricing by St. Louis steel mills fueled by a surplus of No. 1
busheling has finally pushed the prime grades price below
that of shredded steel scrap, which traded sideways this
"It looks like St. Louis will
become the first market to pay more for shred than busheling,"
a source told AMM Friday.
"Shred sold higher than
busheling," a second source confirmed. "Busheling ended up
anywhere between $5 to $10 down depending on where you traded
According to sources in the St.
Louis market, the aggressive pricing for No. 1 busheling began
early this past week, when consumers came out seeking a large
$10-a-ton cut as dealers fought for a sideways market.
By Friday, mill buyers, brokers
and dealers confirmed that a weeklong dealer standoff had been
largely unsuccessful, with No. 1 busheling reportedly sold down
between $5 and $10 per gross ton depending on the buyer. On
average, No. 1 busheling settled at $418 per gross ton for May,
down about $7 per ton from the bulk of April business.
"Prime is definitely down. It
depended on who you were (and) at what number you were at last
month. The range was down $5 to $10," said a third source.
The market largely attributed
the pullback in No. 1 busheling prices to oversupply.
"I hear some dealers possibly
have large piles of prime scrap on the ground that theyve
been building since January. Buyers took advantage of that,"
one large dealer said.
But while No. 1 busheling
dropped by $7 a ton, shred lost less ground in St. Louis,
falling on average just $2 a ton from April prices to $423 per
ton due to a tightness in supply. That puts it at a slight
premium to the traditionally stronger No. 1 busheling
gradea pricing inversion that some sources said could
"Shred for the most part went
down a little. But busheling lost more ground. The inversion is
not good for the scrap market because it means everything is
worth the same. But the materials are not the same. So
something will have to give," said a fourth market source.
At least one market player
predicted the trend might be short-lived, especially because
many mills would prefer to buy No. 1 busheling over shredded
scrap when comparably priced.
"It will correct itself.
Theres a 50-50 chance that will happen by next month. If
prime flows are still good and order books get a little weaker,
then shred will start going down," said a fifth source
But while most sources agreed
the prices had inverted this month, at least one denied the
trend, noting that it saw the grades trading largely "level"
with each other.
"We didnt see a
significant flip. Maybe for small packages sold there was a
flip, but for the most part, we saw it on level," a sixth