Ferrous scrap prices in Chicago appear to be heading sideways
for most grades except shredded for
August after at least two mills in the area reportedly
concluded a majority of their buying programs in the latter
part of this past week.
The sudden entry of
one Chicago-area mill July 31 caught most buyers and sellers by
surprise, as the general expectation was that Midwest markets
would trade in earnest starting Aug. 5.
However, an early and
aggressive push by the mill for immediate deliveries of
obsolete scrap grades like No. 1 heavy melt, as well as plate
and structural scrap, at prices that were unchanged from July
forced other mill buyers to start locking up some tons, market
At least one other
producer had completed a majority of its purchases by Aug. 2 at
prices that were mostly unchanged from July for most grades,
barring shredded scrap.
It is still uncertain
how shred will fare in Chicago this month, with buyers and
sellers reporting a bid-offer range of $360 to $375 per gross
ton, which is sideways to down $15 per ton from July
The market is trading
sideways on most grades because theres relative balance
between supply and demand, one mill buyer in the region said.
"Theres nothing really going on right now that will drive
it one way or the other."
Though most sources
called it a sideways market for all grades except shred, many
buyers and sellers said prices for some cut grades like heavy
melt had shed $1 or $2 per ton on the transactions concluded
"Trends seem to be
sideways on primes (and) sideways to maybe down slightly on cut
grades. Im hearing that shredded is being offered at down
$10 to as much as $15. Seems to be a lot of shred out there and
no shortage of primes, and mill demand overall is relatively
stable. I think our market could be settled by early next
week," a second Midwest buyer said.
In Detroit, only one
mill has reportedly concluded the bulk of its buying with a
late burst by other mill buyers late Aug. 2, ensuring that the
market would settle by Aug. 5. In St. Louis and Indiana, some
spot transactions were concluded by Aug. 2, several sources
said, adding that they expect these markets to follow the
trends being set in Chicago this month.
Looking east, a
Youngstown mill reportedly traded sideways for all grades
except shredded, which it managed to buy at a $20-per-ton
discount to last month.
The move, partially
driven by mills ready to pounce on any prime grades that they
can get, has widened the margin between No. 1 busheling and
shredded scrap to $55 per ton, with those products at $430 per
ton and $375 per ton, respectively, according to some
In the Southeast, some
cut grades have traded at sideways numbers, while one mill
managed to pick up the grades at prices that are slightly less
than in July. Another steelmaker is actively in the market
looking to replenish a weak scrap inventory as this market
continues to develop, sources said.
While market consensus
on sideways pricing for all grades except shred might hasten
the time frame for making August deals, deliveries of scrap
could be strained.
A rail car shortage
and high Mississippi water levels are concerning, sources
"One of the reasons we
were late shipping is we couldnt get the gondolas," one
Pittsburgh source said, while a scrapyard owner said rains have
made loading barges on the Mississippi difficult.
"Before, the waters
were too low in Chicago and we could only half fill barges. Now
that has cleared up and the high waters on the Mississippi are
slowing us down," he said.
Pittsburgh, contributed to this story.