PITTSBURGH Ferrous scrap
buying in the Midwest began in earnest Friday as several steel
mills in the region entered the market at prices mostly
sideways from December.
Market participants said mill
buyers in Chicago, northwest Indiana and those buying from the
St. Louis region started negotiations early Friday. A number of
mills reportedly have secured significant tonnages of obsolete
and prime scrap at sideways prices from the previous month. The
markets, however, are expected to settle Monday, as prices were
yet to be finalized on several trades Friday afternoon.
In the Mid-Atlantic, mills in
the Philadelphia region concluded a majority of their purchases
Friday, sending obsolete prices $10 per gross ton higher
for January over a month ago. Sources said an improvement in
export market sentiment fueled the increase, surprisingly
making Philadelphia the first city to settle this month.
Scrap markets in the Ohio
Valley, Pennsylvania, the Southeast and parts of Canada have
yet to establish a direction for January prices, though a
downward spiral appeared unlikely.
Initial expectations for higher
prices that rang in the new year have evaporated, with mills
trying to enter the market at sideways pricing. Mill buyers and
suppliers have managed to successfully create an atmosphere of
no urgency to ship or receive raw materials.
"Yes, it is January, which is
always an up month. Iron ore prices are at a five-month high,
and export is up, so scrap should be up, but it is not. These
are all factors that play into prices, but at the end of the
day, they are just thatonly factors," said a Canadian
There are a plethora of reasons
for the ambivalent pricing arena, said one broker who
represents a steelmaker. Sellers willingness to ship on a
to-be-determined basis has contributed to the silence and has
dealers conceding sideways, he said.
"Mills are having trouble
gauging what they need. Plus, there was a lot more volume
traded in December than people realized," the broker said.
"We are dragging our feet
because if the market is sideways today, we can always sell
sideways tomorrow or the next day," said one supplier into the
Birmingham, Ala., market.
One Birmingham mill has managed
to pick up a third of its needs at a sideways price, and two
others are trying to make a similar move. Order books at
another Birmingham mill are short, and there is no expectation
that sales will show a marked pickup over the next 30 days.
One scrap broker sold sideways
into half a dozen Birmingham mills Friday afternoon.
Another seller into Birmingham
blames the erosion of earlier expectations for higher prices on
lawmakers in Washington. "The fiscal cliff wore everybody out,"
the seller said. "People dont feel like spending
While early sales in Birmingham
were sideways, players in the Carolinas and Atlanta markets are
still holding out hope prices will be up in January.
Meanwhile, in Pittsburgh, one
seller agreed to ship material on a to-be-determined basis to a
local mill, while another has sidelined himself for the
"The mills are trying to go
sideways. The only question is, Will they get what they want?
Because locally, we dont see a big inventory overhanging
the market," the second Pittsburgh seller said. "We may not
know the answer until February, when we find out if the scrap
In Cleveland and Youngstown,
Ohio, mills have either not yet entered the market or are
accepting some tons on a to-be-determined basis.
On the Canadian front, Ontario
is quiet, with local mills not planning to enter the market
until next week. "The order book for at least one producer
stinks right now, so there is no need to rush for scrap," said
a Canadian scrap executive.
Sean Davidson, New York,
contributed to this article.