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Chicago ferrous scrap prices dip $10/T

Keywords: Tags  steel scrap, ferrous scrap, scrap prices, Chicago market, St. Louis market, Cleveland market, heavy melt, shredded scrap plate and structural scrap

NEW YORK — Ferrous scrap prices in Chicago shed about $10 per gross ton for September on most grades consumed by steel mills as prime grades eventually followed a weakening shredded scrap prices.

Mills in neighboring Indiana turned the heat on dealers this past week to attempt purchases that were down $15 per ton, but uncertainty surrounds how many tons actually traded at those prices, market participants said.

Buyers at Chicago-area mills spent little time on talks as most dealers were said willing sellers at discounts of $10 per ton.

"We knew going into the month that shred was going to drag the market down and a drop of $10 was only reasonable. So we didn’t fight the buyers," one Chicago-area dealer said, echoing other views.

Tussles for cut grades such as No. 1 heavy melt and plate and structural scrap led to $9-per-ton declines from August levels for the two grades, with shredded scrap recording a similar move and the prime grades of No. 1 bundles and No. 1 busheling dropping $10 per ton.

AMM’s September assessment for No. 1 busheling settled at $400 per gross ton, shredded scrap at $357 per ton and No. 1 heavy melt at $342 per ton.

Sources suggested that Chicago and Indiana mills lowered their prices after covering a majority of their requirements, with one source suggesting that at least one mill was now offering prices that were $15 to $20 below its August levels.

In the St. Louis region, sources reported trades at similar numbers, although some said the prime grades could move a lot lower for shipments outside the region.

In Texas, several sources said they had concluded trades at prices that were unchanged from August, although some market players suggested there could be a $10 to $20 drop on prime grades before the market settles. However, other sources said price drops in Texas were unlikely.

"The mills in this area need scrap and there is very little scrap on the ground. Everybody’s inventories are low; mills and scrapyards," one Houston-area dealer said.

The few mills in Texas have been slow to enter the market, a second source said.

"Sideways seems to be the trend although demand is very robust from all the Texas mills and Mexico, and supply is tepid still. Docks continue to buy cargoes sold in August for September shipment. All in all, sellers are selling less tons in September," another area dealer said.

Meanwhile, Cleveland is shaping up to be the weakest market with a planned outage at one mill, an unplanned outage at another and weaker demand from its remaining mills.

Shredded scrap sales concluded thus far were reportedly down around $20 per ton, with one mill securing its needs at a drop of $15. Prime scrap has traded $10 lower and heavy melt at a $15 discount to August, with plate and structural poised to follow suit.

Plate and structural scrap needed to fall to create a spread with shredded scrap, while prime grades needed to drop to prevent the price spread with shredded from widening, sources said.

In the Carolinas and Atlanta, prices were shaping up to be $10 lower, with Birmingham likely to record a similar trend.

Lisa Gordon, Pittsburgh, contributed to this story.

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