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Ferrous Scrap Index sideways in unusual Jan.

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 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 industry—barring the weaker special bar quality (SBQ) product segment—reportedly 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 unfounded.

"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, AMM’s 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.

Meanwhile, AMM’s 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 AMM’s Midwest Ferrous Scrap Index for No. 1 heavy melt settled Thursday at $357.01 per gross ton, up 18 cents from December.

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