PHILADELPHIA AMMs Midwest Ferrous Scrap Index roared back this month near September levels as the domestic market followed stronger export cues and supply-side concerns helped erase almost all of Octobers weakness.
Resurgent demand from some pockets in the Chicago region and a nearly 20-percent increase in monthly requirements by some producers offered more upside support to scrap prices in November as tags jumped more than $50 per gross ton.
Meanwhile, a modest drop in flows of prime scrap from manufacturing plants that took scheduled outages over the past few weeks helped No. 1 busheling tags break away a little more from prices of shredded scrap. As a result, AMMs Midwest Ferrous Scrap Index for No. 1 busheling settled Monday at $389.74 per gross ton, up $53.82 per ton or about 16 percent above $335.92 per ton in October. Meanwhile, AMMs Midwest Ferrous Scrap Index for shredded scrap settled Monday at $386.11 per ton, up $51.35 or about 15.3 percent above $334.76 per ton in October.
While the two grades traded within a dollar of each other in October, this months widening to a more than $2-per-ton spread came as no surprise to most market participants, who said they expect busheling tags to return to historic premiums over shred in the coming weeks and months.
"Mill buyers and scrap sellers understand that value-in-use of scrap and therefore are well aware of the true value of busheling. I expect it to return relatively soon to the premium it has and should command over shred," said one source.
In the overall Midwest region, heavy melt posted the strongest pricing gain in November as AMMs Midwest Ferrous Scrap Index for No. 1 heavy melt settled Monday at $358.38 per ton, up $51.68 per ton or nearly 17 percent above $306.70 per ton in October.
Export prices also received a boost this week as news of a lone U.S. bulk cargo sale to Turkey late last week made its way into the marketplace.
After a two-week lull, reports trickled in of a mixed cargo sale to a Turkish mill for prompt delivery at $410 per tonne for an 80/20 of No. 1 and No. 2 heavy melt. The cargo also comprised shred and plate and structural, which sold at prices $5 and $10 per tonne higher, respectively.
Market participants said the price was weaker than expected, and a few sources said confirmations on the final prices of a tender released by a Turkish mill would offer a clearer idea of price levels in coming days.
The lone sale, however, sent AMMs East Coast Ferrous Scrap Export Index soaring Monday to $391.30 per tonne for HMS 1&2 80:20 f.o.b. New York, marking a rise of 11.3 percent or $39.77 from $351.53 per tonne previously.
Reports of a U.S. offer off the West Coast to China helped lift AMMs West Coast Ferrous Scrap Export Index to $357.13 per tonne f.o.b. Los Angeles, a gain of nearly 6.7 percent from $334.81 per tonne previously. West Coast exporters continue to struggle to secure bulk cargo shipments as offshore demand remains absent.
Sources said increased activity and pricing in containerized scrap exports to Taiwan could bring some bulk activity in coming weeks.