NEW YORK Ferrous scrap
prices in Chicago have dropped between $45 and $51 per gross
ton for different grades as buyers took advantage of weak
demand and strong prime scrap flows, as anticipated.
Scheduled outages at some mills
and a push for more prime scrapsuch as No. 1 bundles and
No. 1 bushelingin a market flush with the material but
tight on shredded supply forced prices to move toward the
higher end of a previously suggested $30 to $50 drop.
Mills in Chicago and the
surrounding area might not have succeeded in sending prices
down $60 to $65 per ton, as their counterparts in Detroit did
last week (
amm.com, Oct. 4), but buyers contacted by
AMM said they were content with the $45- to
$50-per-ton drop from prior month levels for most products.
As expected, obsolete grades
fared better than the prime grades in Chicago.
Volumes were traded over the
course of last week, with early sales taking a bigger hit and
late-week sales securing modest rebounds, sources said. The
prolonged trading resulted in many mill buyers and suppliers
reporting trades within a $10 range, which some said were
narrower than previous months.
With most of the volumes
transacted in Chicago, No. 1 heavy melt dropped $48 per ton to
$310 for October deliveries, while shredded fell $47 to $335
per ton, according to market participants.
Meanwhile, plate and structural
scrap proved to be the most resilient of the steel scrap
grades, dropping $45 per ton to $325 for this month.
In the prime scrap market, No. 1
bundles traded a tad weaker than No. 1 busheling and was the
worst-hit scrap grade in October. No. 1 bundles settled at $331
per ton Monday, down $51 from September, while No. 1 busheling
fared marginally better as it dropped $50 per ton to $337 per
Buyers at several mills, traders
and suppliers suggested that the late-week strengthening in
prices was likely an early sign of a market that has hit
"I think the domestic market has
bottomed unless mills order books go off some more," one
source said, echoing a popular market opinion.
"I dont know if this means
prices will come up anytime soon, but I think it could go
higher in December and January while moving sideways in
November. Perhaps there will be movement within the range we
saw this month," according to a second source.
However, a few sources refused
to speculate, indicating that the market has discussed the
possibility of price floors during several months this
"Who knows when things may turn
around? Everyone still needs a cash flow, so they need to sell
some tonnage. $300 per gross ton scrap is still a lot of money
to tie up even if the cost of money is cheap," the second