NEW YORK A steel mill in
the Chicago area entered the scrap market Wednesday to secure
metal at mostly unchanged prices, leaving market participants
divided on whether overall price levels would rise this month
as some had previously speculated.
A number of sources reported
that a consumer entered the market early and successfully
booked some obsolete grades at numbers that were sideways to
last month. One source familiar with the mill said the consumer
bought all the scrap it needed for January at mostly sideways
pricing, although others questioned just how much volume the
mill had actually secured.
Grades traded reportedly
included heavy melt and plate and structural scrap, although
the consumer has yet to fix prices on shred and prime grades,
"It was the vendors with a large
presence here that offered sideways at the start," the source
familiar with the mill said Thursday. "Since we were only ever
talking a sideways to up-$10 market, with the river problems,
stable scrap supply and stable demand, its hard to push
for a change. Vendors with a large presence outside of Chicago
were resistant, but seem to be coming around this morning."
Sources said No. 1 heavy melt
was sold to the mill at between $355 and $360 per gross ton. In
December, AMMs assessed price for No. 1 heavy
melt was $358 per ton, which was itself largely unchanged from
Novembers $359-per-ton level.
Prior to the year-end holiday,
most market players in the Midwest had predicted that January
scrap prices would be flat to up as much as $20 per ton from
December levels (
amm.com, Dec. 21). But following the early
sideways trades by the Chicago mill, some market participants
said flat appeared likely to be the January trend.
"We have no firm quotes, but
preliminary indications are sideways from two to three other
consumers we sell to. Im surprised that prices are not
stronger, but I think this is a good indication of a
less-than-robust order book," a second source said.
A third source said he also had
heard that most mills will be trading sideways, "although we
expect many of the mills to wait until next week to make the
majority of their purchases."
Some suppliers, however, said
they would hold out for better prices. "I have made no sales
yet. Mills are trying to go sideways, but if they cant
fill their needs they will have to raise their prices. I think
we will see better-than-sideways numbers before this is over.
My fingers are crossed," a fourth source said.
A large consumer agreed. "I
think dealers are reluctant to sell at sideways levels at this
point. Weve heard that maybe a couple of other consumers
have put feelers out at sideways levels, but nothing has traded
yet. It feels like the market could take several more days to
develop. Other than some potential regional weather issues,
there doesnt seem to be much reason for any sort of
sizeable move," he said.
Market rumors Thursday that
another mill also was buying scrap at sideways numbers were
denied by a buyer at the mill. "I am not in the market yet. I
believe the market will probably trade sideways, but I am not
certain of that yet," he said. "The dealers can posture all
they want, but I dont believe demand will support up
money even with lower supply inventories. Well see,
though. Most are still getting their bearings after a long