ISTANBUL A late bounce in ferrous scrap prices in some pockets of the Midwest prevented key markets like Chicago and St. Louis from settling Feb. 6 as previously anticipated, even as trading in other markets like Detroit and parts of the Ohio Valley came to a close.
Early buying by mills in the Detroit region with little incentive to chase scrap pushed final prices down $20 per gross on all grades, except turnings, compared with January levels.
But outside of Detroit, February negotiations in the Midwest were still very much ongoing late in the day Feb. 6.
In Chicago, some mills had traded at prices that were down $10 per ton during the early hours of buying, but a subsequent push back from dealers brought some renewed strength, with later trades reportedly down just $5, market sources said.
Sources said they largely expected the Chicago market to settle late Feb. 6 or by the afternoon of Feb. 7 as mills look to fix prices for their remaining February requirements.
"Things appear to be firming up, though, as supply seems a little tighter than anticipated and demand is a little stronger than expected with a short shipping month," a buyer for one Chicago-area producer said.
One supplier in Chicago said he was content with a market that was down $10 on such grades as shredded as prior speculation had pegged the drop at $10 to $20.
"In such a scenario, when you finish at $10 or under you feel pretty good. We havent had much of a winter. Combine that with a weak export market and mill demand, and this months drop isnt that bad," he said. "Of course, weve had a cold snap now that has sent scrap flows spiraling down, so were not going to have a normal February in terms of scrap collection."
The trend was similar in St. Louis. Two consumers secured some early volumes at down $15 per ton for cut grades and down $12 to $13 for prime grades, sources said, but mills that stepped in later were reportedly trading at prices that were down $10 to sideways on some grades as the market appeared to strengthen.
But in Northwest Indiana, the market was a bit weaker, with early trades said down $15 per ton or slightly more, depending on the grade.
Moving east, after some mills in Cleveland entered the market Feb. 5 at down $20 per ton, the remaining mills and scrap sellers fell in line on Feb. 6 and the city settled down $20 across the board. One Cleveland-area mill was trying to pick up scrap at down $25, but no sellers were motivated to accept the offer, sources said.
Youngstown, Ohio, followed suit and settled for February at a $20-per-ton discount to January deals.
"Things have been slow to settle because there is so much confusion, and people are treading cautiously," a broker selling into Ohio said.
Some of the Ohio Valley weakness might be due to an excess of material from Canadian suppliers, the Ohio broker said. "Mills in Canada are not doing overly well right now, so they are not consuming the scrap generated in their own area. Canada has scrap surplus and they are pushing the scrap down here."
Meanwhile, mills in the Cincinnati area picked up their scrap needs at down $15, while Pittsburghwhich hadnt settledremained a moving target. There is an expectation that prime grades of scrap might mirror Cincinnati and retreat $15 per ton, while shredded scrap might fall $20 after all the buying is completed, sources said.
In the Southeast, prices were also looking to be down $15 per ton, sources said. Many suppliers were still waiting for mills to enter the market, while other sellers held off in hopes of sideways transactions, sources told AMM.
Lisa Gordon, Pittsburgh, contributed to this story.