NEW YORK Ferrous scrap prices have traded at least $25 per gross ton higher in markets like Detroit and Chicago after several steel mills finally offered firm prices Nov. 5.
Across all scrap grades, prices jumped between $25 and $35 per ton, depending on last months price, scrap type and delivery location, market participants said.
Over the past few days, mills in several regions locked in volumes on to-be-determined prices, ensuring that their needs were met while waiting for additional cues on final pricing, market participants said.
Mills in the Detroit region were again the first in the Midwest to officially enter the market this month at bids of $30 per ton above October levels. Sources said only one mill in the region is believed to have conducted business below those levels.
Shortly after news of Detroits trading, mill buyers in Chicago and Indiana reportedly stepped into the market with firm prices, and early trades were logged on obsolete grades, shredded scrap and prime scrap at monthly increases of between $25 and $35 per ton.
"Up $30 seems to be the number that works," one mill buyer said, while a second reported buying some volumes of shredded scrap and heavy melt at increases of $25 to $30 per ton.
Several market participants said they expect the Midwest to be Novembers strongest market, with its southern and eastern counterparts likely to record lower increases due to a drop in demand.
"I expect Chicago to continue to be the strongest market. One concern with higher prices will be whether brokers will be taking positions. My feeling is that they will give mills a false sense of security regarding available supply. I will have a close eye on flows into dealer yards this month with the up market, but I suspect it wont surpass demand any time soon," one supplier said.
"Cleveland is the weak spot. If they were buying, this market would hit (increases of) $40 to $50," a second supplier said. "People are laughing at $20 (increases) out east."
Early sales into mills indicated that the Pittsburgh market could be up $30 per ton on shredded scrap and $20 per ton on other grades. A reduced buy of No. 1 busheling by one consumer and another mills lack of appetite for heavy melting scrap and plate and structural scrap are keeping these grades from increasing as much as other areas, sources said.
In Cleveland, deals for prime grades were being done at $20 per ton higher, with no firm prices on shredded or cut grades. The Cleveland area might finish the weakest this month, with one mill only buying 40 percent of its usual volumes and no heavy melt.
A second mill in the region had early scrap shipments held up due to operational problems and reportedly doesnt need to build any inventory.
Across the country, most sources said they expect markets to finish trading by Nov. 7 at the latest.
"I think with this being a shorter month with days off due to the Thanksgiving holiday that mills will not waste much time determining prices and buying. I would think it would be (Nov. 6) or the next day," one Midwest source said.
In Texas, one supplier said a mill entered the market late Nov. 5 with bids that were $25 per ton higher for some obsolete grades.