NEW YORK Steel mills in Chicago, St. Louis and other major steelmaking regions, including parts of the Ohio Valley and Mid-Atlantic, saw no change in ferrous scrap prices this month as sellers refused to consider weaker offers despite diminished demand from several mills.
"Flat as a pancake. Zero change by all," one scrap market source said of Decembers prices.
Earlier market expectations of higher ferrous scrap prices in December based on typical seasonal trends meant buyers at most mills were content trading flat, sources said.
There were sporadic reports of some trades trekking about $5 per ton lower in regions like Chicago, but those were viewed as "minor corrections" for suppliers that garnered higher tags in November.
"Any down numbers are probably getting someone back in line that had gotten a bigger number last month for whatever reason," a second source said.
Most sources in Chicago and St. Louis said that early attempts to soften prices even slightly were quickly squashed after sellers refused to relent, forcing both markets to settle sideways by Wednesday afternoon.
"We went sideways. On a few small deals we managed to take it down a little bit, but that was to suppliers we paid a bit more last month," said a buyer for one Midwest mill, which nearly halved its December intake compared to last months volume.
Several other Midwest mills also entered with smaller buying programs for December as they look to keep year-end inventories lean ahead of the upcoming holidays.
For a majority of the tons traded, Chicago sources reported unchanged prices from November levels, when No. 1 heavy melt settled at $359 per gross ton and No. 1 busheling at $390.
Several sources also reported sideways numbers for shredded scrap in Chicago, but with actual transaction prices on some large tonnages still left to be negotiated, shred stood out as the only major grade yet to be settled in Chicago.
In St. Louis, No. 1 heavy melt was unchanged at $335 per ton and shredded was unchanged at $380.
Chicagos and St. Louis sideways settlements came on the heels of a similar trend in Detroit, which finished the bulk of its December trade on Tuesday at flat numbers (amm.com, Dec. 4).
Outside of the Midwest, the trend also was largely sideways. Mills in the Ohio Valley and parts of the Southeast so far have seen November prices roll into December, sources said.
"Everyone is sideways on all grades with no exceptions," said an Ohio scrapyard broker who sells into both areas.
In Youngstown, Ohio, shred is selling for $400 per ton, No. 1 busheling is at $395 and No. 1 heavy melting scrap remains at $355.
Following the sideways move, one Ohio scrap executive said the annual expectation of better prices in the new year is off his radar. "There is a hope that January is going to pop, but it is crystal clear to me that is not the case. If you think January and February are going to be strong months, youd best get off that delusional train at the next stop. Things look pretty bleak," he said. "There is not a lot of scrap out there, but there is not a lot of demand either."
Birmingham, Ala., also recorded a lateral move. One mill initially offered up $5 per ton to secure its needs but altered its course and headed sideways after it became apparent that the market was flat.
In Pittsburgh, where prices have not yet settled, a mill buyer said that the general malaise gripping the economy is apparent in his mills softening order book.
In Cleveland, mills also are still out shopping for their December needs. One mill picked up some shred and cut grades at a $5-per-ton discount to November levels, but Cleveland nonetheless appears to be preparing to join the ranks and settle sideways.
Talks also are continuing in the Carolinas, where some mills completed their buys at sideways numbers and other mills continue to hold out in hope of securing their needs at a $5 discount. With export activity waning, some traditional exporters are said to be offering scrap into the domestic market on the southeastern seaboard, supporting the possible downward trend.
"Whatever it is, it is. Demand is just not as strong as it has been in previous Decembers," a southeastern mill buyer said.
Lisa Gordon, Pittsburgh, contributed to this story.