NEW YORK Steel mills in
the Detroit region have concluded the bulk of December scrap
trade at the same price levels recorded in November, a trend
some say suggests other regions could also see flat pricing
when their markets settle later this week.
The monthly scrap dance began
Tuesday morning in Detroit after negotiations and
small-volume trading in several pockets of the country pointing
to a sideways domestic market. Though consumers in Detroit were
noncommittal during the first half of the day, buyers entered
after lunch with sideways numbers after sellers resisted any
push down, a number of sources said.
"There was some posturing.
Negotiations went a little bit back and forth, but larger
dealers in the area said they werent selling anything if
it wasnt flat. So buyers accepted sideways," said a
source at one Detroit mill.
A source at a second mill
confirmed that buyers left prices flat despite sensing a
weakness in the market.
"I think the markets a
little bit weaker than sideways. Supply continues to drive this
market. Theres enough prime out there to meet demand or
exceed it. But No. 2 frag (shred) is propping up the market,"
Meanwhile, other regions are
expected to develop and possibly settle Wednesday, according to
Market participants said steel
mills in the South were among the first to open talks with
suppliers this week in the hopes of securing tons by rail as
barge logistics along the Mississippi River remain a concern
amm.com, Nov. 28). Buyers in the South reportedly
offered firm sideways numbers with no attempts to claw back by
a few dollars.
In other regions, however, some
buyers are still hoping for lower prices this month.
In the Ohio Valley region, for
example, the market could trend a few dollars under November
levels after a source at one mill indicated it had made some
buys on shred and No. 1 heavy melt at $5 per gross ton below
Novembers levels. Though a $5 decrease is still largely
considered a sideways market, it is the first sign of
transactions below last months levels.
Some mills are said to be
targeting lower prices in Chicago as well, although whether
that proves to be the case when the market settles remains to
"Chicago is trying to trade down
$5 due to the fact shippers cant get on the river," said
a fourth source. "Export is weaker and December demand is
weaker, so dealers will ship some scrap at sideways, but
January promises to be better."
A fifth source suggested steel
mills in the Chicago region did not trade on Tuesday because
one major Midwest consumer remained silent in the hopes of
better pricing ahead.
"(The consumer) is doing the
usual and going underground as they sense some weakness and
feel the longer they wait, (the more) dealers will end up
selling down. Thus other mills are all doing the same," he
"Nobody seems to be in a hurry
to do much, although quite a few suppliers have asked for
to-be-determined orders in order to keep shipping," said a
sixth source, based in the Midwest. "If the market ends up
sideways, the dust should settle pretty quickly. If the mills
push hard for down money, things could get drawn out."
However, a source at a mill in
the Chicago region said he would be "shocked" if mills
succeeded in lowering tags for December.
"I dont think there will
be a significant move in any direction. I would be shocked if
anyone was successful at driving it down $10," he said. "Any
type of real aggressive move down will dry up tons.
"Some people will be in the
market for larger packages, so theyll be happy at going
sideways and getting it done," he added. "Frankly, sideways is
good. I dont see many buyers being upset with that."
One supplier agreed a sideways
market would be a fair compromise for December.
"In my experience, if
theyre a little unhappy and Im a little unhappy,
then its a fair market," he said. "So it will go
sideways. This is the biggest nonevent of the year. From
January to now, there was so much volatility. And the biggest
news to come out of December is that nothing happened. And
Im happy about that."