PITTSBURGH Steel mill
buyers and ferrous scrap suppliers expect March pricing to be a
repeat of January.
"This market is supply-driven.
There is no inbound flow, and buy prices are already rising. I
expect at least January levels, possibly more, in March," said
an executive for a large chain of scrapyards serving Ohio and
The scrap market pulled back in
February as mills were able to secure their melting needs at
discounts to Januarys prices, but those deals are no
"Some mills came back and paid
January prices for plate and structural scrap. Its pretty
clear that with good demand in the east and insufficient buying
in February, well see January prices or very close around
here, and maybe a little higher for the cut grades," an East
Coast player said.
An Ohio mill buyer agreed. "We
are anticipating a rebound in scrap prices for March to where
the market was in January, and possibly higher on some grades,"
"Several mills we sell to came
back for more, signaling that they either were caught short or
wanted to take advantage of the bottom of the market," an Ohio
broker said. "When dealers heard that, they pulled back. We
believe this response will push the market to recover all $10
to $20 (per gross ton) that consumers took out of the
One East Coast supplier said a
mill tried unsuccessfully to buy more prime material at
February numbers. "Mills may have to give back some of what
they took in February to secure March tons," he said.
A Mississippi River market
player said the absence of a January bump in prices leaves
little wiggle room for scrapyards. "There was not an increase
in the price of scrap during December and January. Normally if
you see a cumulative $60(-per-ton) rise in the middle of
winter, the price gives all of that back in the spring," he
said. "Theres nothing to give back this year, so
its likely we will see very small movements in the market
for months to come."
In Houston, one scrap supplier
said that prices look poised for improvement, and shredders
have raised their scale prices by $10 per ton to improve the
flow. One mill was said to be having trouble obtaining a steady
flow of scrap.
Supply concerns seem to be
driving the momentum. In February, many mills reduced buys but
were unable to cause a pricing implosion, and prices eased down
between $8 and $20 per ton, depending on city and material
"Some mills did not get all the
scrap they needed and will look to March to make up that
difference," the Ohio broker said.
"I think some mills came up
short on their buy," said a broker who sells into the Midwest.
"With February being a short month and inventory reductions at
mills and dealer yards, the March market is poised for an
Sources at scrapyards in all
regions said they were having a difficult time replacing the
tons sold in February. The Mississippi River source noted that
No. 2 heavy melting scrap is selling for $55 per ton lower than
it was at this time last year.
"I believe demand in March will
be steady and supply-driven," said the broker selling into the
Midwest. "Our inventories are low, especially on obsolete
grades. Most dealers are in the same boat, and this will help
fuel the market."
Finished steel buyers pay
attention to scrap for pricing signals, but one major broker
said that he is paying attention to finished steel prices for
indicators. If service centers are successful in buying
finished steel at discounts, mills could try to use weak
selling prices as a negotiating tool.