NEW YORK Midwest ferrous
scrap prices have settled sideways for January as dealers gave
in to mills demands for unchanged prices to kick off the
year, bucking historical trends.
Most Midwest mills in the
Chicago, Detroit and St. Louis areas completed trading between
Friday and Monday, sources said, as numbers identicalor
nearly identicalto those in December poured in.
It was the first time since
January 2009 that ferrous scrap prices did not strengthen from
December to January, and the break from typical patterns caught
many off guard.
"It really surprised me. I
thought it was going up," one supplier source said. "Supply
coming in was off a bit, but then it seems mill orders
werent as strong."
Sources in Chicago said
suppliers inability to ship outside the region due to
Mississippi River transportation issues, combined with steady
flows of scrap into dealer yards, allowed steel mills to
negotiate unchanged prices.
As a result, No. 1 heavy melt
prices settled January at $358 per gross ton, with No. 1
busheling at $390 per ton and shred at $386 per ton.
"I was expecting sideways," said
a buyer for a mill in the Chicago area. "I think demand and
supply are in relative balance right now for a variety of
In other Midwest areas, such as
Detroit and St. Louis, the market followed early price
developments in Chicago (
amm.com, Jan. 3) with keen interest but held off
trading until more Chicago-area mills settled prices. By late
Friday, Detroit- and St. Louis-area mills entered at sideways
numbers, and several buyers reported having no issues securing
"I think there was way too much
hype put into a couple of inches of snow. There was no
resistance at all to sideways numbers," a second mill buyer
A third mill buyer who reported
"no difficulty in securing tons" said he was "turning tons
Sources were divided on whether
overall demand for scrap was weaker this month. Several
suppliers said they were able to sell the volumes they had
targeted, and only a couple of mills said volume dropped a few
"We were able to sell everything
we wanted. Originally, I thought we could get higher prices so
it is disappointing," a supplier source said. "However, more
than one mill said there is concern that some finished selling
prices are shaky. And if the order books dont hold,
demand would be less next month."