Midwest ferrous scrap prices were once again dragged down by a
relatively weak market for shred as prices for September fell
as much as 3 percent compared with August.
said prices for cut grades such as heavy melt and prime grades
such as No. 1 busheling were forced to follow declines in shred
prices to maintain differentials between the grades.
From trading almost at
par with each other to establishing a $40-per-ton spread in
just a few months, busheling and shred have recorded unique
moves in the past few months.
Sources said shred
continues to be oversupplied in many parts of the Midwest due
to better late-summer collections, which meant mills were
guaranteed to press for lower shred prices this month.
Detroit-area mills set
the ball rolling with prices down between $10 and $15 per gross
ton from August, and within days mills in neighboring Midwest
markets completed their buying programs closer to the down-$10
mark, according to sources.
Dealers that accepted
the initial down-$10 offers said they were relieved because
scrap that traded later in the week apparently lost a little
more ground, slipping as much as $15 per ton under August
levels on some grades, sources said.
With the bulk of
trading completed in the region,
AMMs Midwest Ferrous Scrap Index for shred
settled at $356.99 per ton Sept. 10, down 3.2 percent from
$368.85 a month earlier.
Obsolete grades that
are increasingly making their way to the shredder were
apparently forced to ape the move, which becaome evident once
markets settled. Not surprisingly,
AMMs Midwest Ferrous Scrap Index for No. 1 heavy
melt settled at $342.51 per ton, down 3.3 percent from
$354.18 on Aug. 12.
speculation pegged busheling to trade sideways in September,
the fall in obsolete scrap prices and shred weighed heavily on
primes and forced tags lower, according to sources.
"The down $10 to $15
offers from mills for shred and even $15 in some cases came as
no surprise to anyone," one Midwest dealer said. "We were all
anxious to see what would happen to the other grades because
the spread between busheling and shred was already so wide. It
wasnt ideal (for prime prices to drop), but it had to
s Midwest Ferrous Scrap Index for No. 1 busheling
settled at $400.07 per ton Sept. 10, down 2.4 percent from