Midwest ferrous scrap trades beat market sentiment for October
and avoided another month of declining prices as dealers stayed
firm to ward off any downward pressure.
speculation and rhetoric that scrap prices would fall anywhere
between $10 and $20 per gross ton this month, dealers fought
against the tide when many noticed that steel mills did not
cancel unfilled orders toward the end of September, market
"Mill buyers and
mill-owned scrap companies or their exclusive brokers can talk
the market down all they want. But if they dont cancel
orders when they expect prices to drop thats the first
sign that demand is better than we thought," said one Midwest
dealer. "We were hearing all this talk and some people did sell
some tons at down money, but when the mills finally came in
they had heard the same thing from most scrap dealers: that
dealers would not sell below September prices and if mills did
force a drop, dealers would hold back supply for the winter
months when prices always rise."
His assessment summed
up the mood across the Midwest, and mills reportedly were quick
to respond. In Detroit and St. Louis, most major grades traded
at prices unchanged from September, but things developed a bit
differently in Indiana and Chicago.
"The first sale was
your worst sale. We sold some scrap at down $10 on Sept. 30 and
then had to watch as most of the market firmed to sideways.
Your last sale was your best sale this month," a second dealer
A third source said
that the real surprise came late Oct. 3, when the market was
flooded by reports of No. 1 heavy melt and shred selling at
prices above those recorded in September.
"That was an absolute
shock to us," he said. "We expected a sideways market and
fought for it. But to see shred and heavy melt prices go over,
that was a real surprise. Two mills in Chicago were really
In the overall market,
though, the impact of the tons that sold late was minimal, with
heavy melt marginally outperforming the other grades.
Midwest Ferrous Scrap Index for No. 1 heavy melt settled
Oct. 10 at $345.93 per gross ton, up 1 percent from $342.51 a
No. 1 busheling and
shred were unable to match that gain.
Midwest Ferrous Scrap Index for No. 1 busheling settled
Oct. 10 at $401.16 per ton, up 0.3 percent from $400.07 in
September, while the AMM
Midwest Ferrous Scrap Index for shred settled at $358.10
per ton, also up 0.3 percent from $356.99 in the same