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Midwest Ferrous Scrap Index settles sideways

Keywords: Tags  AMM Midwest Ferrous Scrap Index, steel mills, scrap prices, busheling, heavy melt, shred scrap, Sean Davidson

NEW YORK — AMM’s Midwest Ferrous Scrap Index settled sideways for December after a weak export market and lower demand from several steel producers prevented prices from rising.

Attempts to send prices below November’s levels were blocked by suppliers who threatened to stall supply as they wait for higher tags, market participants said.

Midwest pricing for No. 1 heavy melt, shred and No. 1 busheling scrap in the Midwest recorded minor shifts downward, with only heavy melt losing more than a dollar per gross ton.

A few mills that chased tons with aggressive pricing in November were able to rein in their trading ranges for December, causing the slight softness, sources said.

AMM’s Midwest Ferrous Scrap Index for No. 1 busheling settled Monday at $389.31 per gross ton, down just 43 cents from $389.74 in November.

"I call (December’s) market a sideways market with softer bias. (One consumer) took a couple of suppliers down a little only because those suppliers were paid more last month. So they’ve evened out," one source said.

After several months of trading almost on par with shred, the prime scrap grade of No. 1 busheling appears to be holding on to a premium of more than $3 per ton over shred, sources said.

In November, No. 1 busheling prices settled $3.63 per ton above shred; this month, the premium was 30 cents lower at $3.33 per ton as AMM’s Midwest Ferrous Scrap Index for shred settled at $385.98 per gross ton, down just 13 cents from November.

"I don’t see that there’s been any kind of shortage of prime," a second source said. "It has been one commodity that we haven’t had any trouble getting supply of. But there’s been a lot of talk on shred supply."

Buyers at some mills suggested that shredded scrap supply concerns were the primary reason domestic scrap prices across all grades held onto sideways numbers and did not fall in December.

Suppliers acknowledged there had been significant cutbacks in volume from several mills as the industry prepares for holiday closures. However, the prospect of seasonal declines in winter scrap flows allowed sellers to prevent tags from trekking lower, they said.

But even heavy melt tags were not spared a modest narrowing in prices for December, with AMM’s Midwest Ferrous Scrap Index for No. 1 heavy melt settling at $356.83 per ton Monday, down $1.55 from $358.38 per ton in November.

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