NEW YORK Midwest ferrous
scrap prices dropped about 5 percent in May as sellers had
little room to prop up prices on cues of weak domestic and
The monthly scrap dance began
early this month, with steel mill buyers in the Detroit region
stepping into the market on the first day of May and settling
prices at mostly down $20 per gross ton across all grades
amm.com, May 1).
Detroits unexpected move
in what had already been dubbed a down market set the tone for
nearby St. Louis and Chicago to begin negotiations. By May 3, a
majority of the tons in the Midwest scrap market had traded at
close to down $20 numbers, with only some smaller tonnage deals
left to be wrapped up.
Mill buyers said they were
content bidding for scrap at $20 below Aprils price
levels since the market had already talked itself down.
"The speculation leading into
buying week was that the market would drop $15 to $20.
Suppliers had already talked it down and though there was room
to take it down some more we were happy with down-$20 prices,"
said one mill buyer.
Most scrap suppliers said they
were relieved to receive mill bids at down $20 since many
feared the drops could have been more severe.
"Chicago and Indiana consumers
tried to buy early at down $40 but had no takers based on low
yard inventories and reduced flows. The mills that came out
early at down $20 are full," said one seller.
Market participants in Chicago
and Indiana reported only some deviations from the down-$20
trend based on renegotiations of price following better
visibility on previous months final price levels.
The slight deviations did little
to impact the overall price trends in the Midwest, however, and
AMMs Midwest Ferrous Scrap Index for No. 1
busheling settled May 10 at $377.31 per gross ton, down $19.84
and 5 percent from $397.15 per ton in April.
Midwest Ferrous Scrap Index for shredded scrap settled May 10
at $367.84 per ton, down $21.05 (5.4 percent) from $388.89 in
April, and AMMs Midwest Ferrous Scrap Index for
No. 1 heavy melt settled May 10 at $339.85 per ton, down $19.74
(5.5 percent) from $359.59 in April.
The market is now debating
whether Mays pricing reflects a floor, but many said it
was still too early to tell.
"Everybody has got short lead
times (and) everybodys dropping steel prices now so steel
buyers are not going to want to buy steel. So unless
theres some real consumption, theres not going to
be any support (for scrap). Im not sure whats out
there thats going to suddenly be good news," said one