Midwest Ferrous Scrap Index settled sideways for the second
consecutive month in January as supply and demand realities
forced a diversion from the traditional seasonal trend.
In Chicago and northwest
Indiana, steady inflows into dealer yards amid a lack of snow
and the inability to ship scrap outside the region via a
low-volume Mississippi River denied scrap prices any upside
support, according to market participants.
Sources in the greater regions
of Detroit and St. Louis reported similar factors in their
markets, leading to sideways pricing for January, a
traditionally robust pricing month.
At the same time, demand across
various sectors of the steel industrybarring the weaker
special bar quality (SBQ) product segmentreportedly
stayed steady. Apart from a few mills eager to secure scrap
tons, market sources said demand from most producers was
unchanged in January, setting the pace for a relatively
status-quo scrap market.
Market participants said one
mill lowered its scrap intake by about 5 percent due to issues
with a furnace that allowed it to carry some scrap forward into
January. A source familiar with the mill said market
speculation that the mill had a weaker order book was
"Order books are pretty strong.
There were just some production problems at a melt shop that
allowed a carryover of scrap," he said.
Many suppliers reported trading
at normal volume levels and said overall demand from most mills
was steady this month.
"No one balked at the volume we
were offering. And there were no dollar changes from my vantage
point. It was an even market," said one supplier.
As a result of the steady
marketplace, AMMs Midwest Ferrous Scrap Index
for No. 1 busheling settled Thursday at $388.97 per gross ton,
down just 34 cents from $389.31 in December.
"Most people during the start of
the month thought it was going to be up, and then it went
sideways. The river and weather kept a lot of scrap in
Chicago," said a second supplier.
Midwest Ferrous Scrap Index for shredded scrap settled Thursday
at $386.49, up 51 cents from December.
Many sources in Chicago said
shredded prices inched a tad higher toward the end of the
trading week as demand picked up late for shred.
In Chicago, one supplier said
part of the reason for the delayed interest in shred was some
mills chased other obsolete grades first.
"Shred is still managing a
relatively high price, so some mills tried to buy everything
else first," he said.
The source said he lost some
ground on shipments of shredded scrap as plate and structural
volumes picked up.
"On a value basis, plate and
structural scrap prices should (be) closer to shred than they
are right now. With a lack of winter, demolition jobs are going
pretty good in the region, so there was abundant plate and
structural supply. That prevented the price gap to shred from
closing, so buyers first picked up plate and structural and
then negotiated shred," he said.
Heavy melt scrap prices also
fared marginally better in January as AMMs
Midwest Ferrous Scrap Index for No. 1 heavy melt settled
Thursday at $357.01 per gross ton, up 18 cents from