ISTANBUL Chicago emerged
as the strongest market for ferrous scrap in the Midwest this
month, with mills leaving little to chance as they sought to
fill their order books.
Mills in the Chicago region
initially entered the market at down $10 per gross ton from
January levels on all grades, but by the end of trading allowed
dealers to regain a little ground, with most scrap grades
ultimately settling down about $9 per ton.
Although at least one mill paid
down $5 for some tons of No. 1 heavy melt, the overall market
settled at $349 per ton in Chicago, down $9 from January.
Shredded scrap recorded a
similar trend in Chicago, settling down $9 to $377 per ton,
while most prime grades shed an extra dollar to settle down
$10. As a result, Chicago No. 1 busheling settled at $380 per
ton on Feb. 7.
The $9- to $10-per-ton drop in
Chicago, depending on grade, comes on the heels of a $20-a-ton
drop in the Detroit region earlier this week (
amm.com, Feb. 6).
"The market expected prices to
be down some more. But realistically, flows into yards are
down. A cold weather snap just as the market began trading had
a psychological effect, and what played on minds is that we
still have a winter left," one source said of the Chicago
market. "Mill demand was the same and Chicago was the weaker
market in recent months, so its more an equalization
against neighboring markets."
Meanwhile, mills in neighboring
northwest Indiana were able to drive prices down a lot further,
especially on prime grades, which many reported were down as
much as $15 per ton.
"Mills in northwest Indiana took
advantage of some cheaper scrap from the east. They were able
to buy lower than Chicago and the thinking is that, with that
eastern scrap and home scrap collections, they could wait until
next month. If they fall short and come west into Chicago for
scrap, they will have to pay up," said a second source.
Chicago and northwest Indiana
mills typically trend together, so Chicagos relative
strength surprised some suppliers.
"Theres so much prime
scrap coming in from Canada, I dont know why Chicago
mills went down only $10 on primes. It makes no sense," said
Outside the Midwest, sources
reported a similar trend of buyer resilience leading to
higher-priced deals as the week progressed. In the Southeast,
for example, prices bounced back from early deals that were
down $20 a ton. One producer was reportedly even trying to pick
up its needs at as much as down $30 a ton.
"Mills did come out and try to
buy at down $20 numbers but didnt have a lot of success,"
said a shredder operator in the region.
But as metal recyclers refused
to bite at those lower numbers, prices steadily improved
throughout the week. Paid prices in the Carolinas and
Birmingham, Ala., varied significantly, with No. 1 busheling
scrap sales down between $10 and $20 per ton, depending on the
mill, and at least three mills in the Southeast reportedly
picking up their needs at down $10 a ton. The No. 1 busheling
markets in both regions ultimately settled down $12 a ton.
Sources said they suspected the
higher prices as the week progressed were due to mills
realizing there is not a lot of scrap overhanging the market,
despite overall demand remaining lackluster. "Mills were buying
less, and even without a normal buying program, I was unsure if
I could cover what I sell them," said a scrap processor.
In Ontario, prices settled
mid-afternoon Feb. 7, with final buying levels down $10 a ton
on prime grades and down $20 a ton on all other material.
Meanwhile, the Pittsburgh market settled down $15 a ton across
the board, except for prime bundles, which only saw a
$10-per-ton reduction from January buys.
Lisa Gordon, Pittsburgh,
contributed to this story.