CHICAGO Pricing indices
for most commodity metals fell for the third straight month in
June, with some off by double-digit percentages compared with
the same month last year, according to the Bureau of Labor
Statistics latest producer price index (PPI) report.
The PPI for steel mill products
fell 1.3 percent from May and 3.2 percent from June 2011, while
the PPI for iron and steel scrap tumbled 12.4 percent from May
and 18.3 percent from a year ago.
An East Coast flat-rolled
service center owner said hes been talking to scrapyards
from Chicago and Detroit to the Eastern seaboard. "They are
saying the last decrease of $45 (per ton) is the last
onethe absolute bottom of the market," he said, referring
to AMMs consumer buying price for shredded
automotive scrap in the Chicago market.
Steel producers today cannot buy
at the lowest number because of Turkish exports and slim scrap
generation, he said. "Dealers are unwilling to give them the
full effect (of the published price). Why give it away when
theyre all predicting higher pricing next month?"
"There are a lot of wild-card
factors out there," a source at a full-line carbon steel
distributor in the Midwest told AMM. "The one item
that hasnt hit the market yet is the cost of the
(Midwest) drought. It will drive crop prices through the roof.
And we still have Europe and Chinas slowdown hanging over
us. I dont see any huge positives out there yet."
The East Coast service center
owner acknowledged the European and Asian demand factors, but
noted that foreign steel pricing is higher and imports have
dropped. Domestically, he said, if steelmaker ArcelorMittal USA
Inc.s labor talks (AMM, July 3) hit a snag, "all
bets are off. If we get close to the end of August and there is
no settlement, youll see antsy people trying to buy or
He believes the domestic market
is at the bottom of the steel cycle "and about to go in the
opposite direction, starting next month. The light at the end
of the tunnel is coming."
"Everybody is realizing there is
too much steel being made and not enough being consumed.
Were looking to the brainpower of the steel market to act
responsibly and fit production into a consumption equation that
works," a source at a Great Lakes coil processor said. "A lot
of us go to bed at night praying that ArcelorMittal strikes. It
could do wonders for everybody."