NEW YORK Steel mills and
their suppliers spent little time negotiating scrap prices in
Chicago and Indiana this past week as both sides agreed to
follow a mostly down-$20-per-gross-ton trend set a few days
earlier in Detroit.
Most mills in Chicago and nearby
Indiana began tying up tons on May 2, and by the afternoon of
May 3, the few that decided to wait out the market slightly had
also wrapped up their May buying programs, according to several
When the dust had cleared and
the bulk of trades had been completed, AMMs
assessment for No. 1 heavy melt prices settled in Chicago at
$341 per gross ton for May, down $20 from April levels.
Though both prime grades and
shredded scrap began trading early at prices down $20 per ton
from April, many sources said shredded prices weakened further
in the last quarter of trading. As a result,
AMMs shredded scrap assessment for Chicago
settled May 3 at $368 per ton, down $22 from April, while No. 1
bundles fell $20 per ton to $371 per ton. No. 1 busheling
finished the bulk of trade at $380 per ton for May
"It went a little easier.
Everyone was in agreement that down $20 was the level. Shred
took a slightly bigger hit because its in very good
supply," said a buyer for a large producer. "I was surprised at
how quickly things settled. I think theres just this
general feeling out there of weakness, with nothing positive on
A buyer for a second mill said
there had been a lot of discussion on whether May prices had
hit the bottom.
"I looked back at last year and
found that in July and October, primes traded $40 below where
we are today. Demand is going to continue to be kind of where
its at now or softer, unless exports came in or supply
gets tight to a point where demand outstrips it," he said.
One Midwest dealer said he
thought the down-$20 bids from mills were a "gift" because
prevailing market conditions, such as weak exports and finished
steel demand, meant "prices could have been a lot weaker."
Outside the Midwest, markets in
the Southeastincluding Birmingham, Ala., the Carolinas
and Atlantasettled down $20 across the board. Some
sellers in the Carolinas reported caving in and accepting down
$25 a ton on cut grades of scrap, but those transactions were
A few regional sellers indicated
they were surprised that No. 1 heavy melting scrap dropped with
the rest of the market as there appears to be less of that
grade available. Recyclers have been steadily feeding No. 1
heavy melt into shredders because shred commands a nice premium
Scrap sellers in the Southeast
said they are leery about the June market and didnt put
up a fuss about the $20-ton discount. "The report is out there
that there will be no export market for a while, and even
though it is a hard pill to swallow, people are willing to sell
at down numbers," a national broker said.
In Ontario, the U.S. Steel Corp.
labor strike is so far showing no signs of wearing on the
market, and participants indicate the market has settled at
down $20, but this could not be confirmed by deadline.
Youngstown, Ohio, settled down
$15 on prime grades and down $20 on other grades. Mills in
Youngstown, as in Pittsburgh and Cleveland, are competing for
prime scrap, which kept busheling prices from moving down $20.
In Pittsburgh and Cleveland, prime scrap may also finish at
down $15 when the dealmaking is concluded.
Pittsburgh and Cleveland look as
if they will not finish their buying programs until May 6,
sources said. "Certain consumers are done with their buys, some
deals are being done now and some consumers are dragging it out
until Monday," the national broker said.
Shredded scrap had sold into
Cleveland at $370 and $375 a ton and into Pittsburgh at $370 a
ton. Heavy melting scrap in Cleveland may not settle down the
full $20 either as there is decent demand for this grade,
Lisa Gordon, Pittsburgh,
contributed to this story.