LOS ANGELES A boost in a benchmark scrap price may bolster the chances for increased structural steel tags to succeed.
AMMs consumer buying price assessment for shredded automotive scrap in the Chicago market rose to $390 per ton last week, up $31 from October. This would appear to satisfy some participants, who said earlier that the market needed to see a scrap increase of at least $25 per ton for any price firming effort on beams to succeed.
"Thats probably enough for the mills to push through an increase," a Midwest distributor source said about the rise in Chicago shredded.
Tampa, Fla.-based Gerdau Long Steel North America and Steel Dynamics Inc.s Structural and Rail division in Columbia City, Ind., announced $20-per-ton increases this past week (amm.com, Nov. 5). But market sources said the key to any increase is the participation of Blytheville, Ark.-based Nucor-Yamato Steel Co., whose price moves often are accompanied by similar action by Charlotte, N.C.-based Nucor Corp.s Berkeley beam mill in Charleston, S.C.
If the increase becomes unanimous, thus raising the published f.o.b. mill price on core beam sizes to $785 per ton ($39.25 per hundredweight), most market sources will then speculate if this would begin to close the gap between the published price and the prevailing discounts under book to medium and large service centers, estimated at $40 to $60 per ton ($2 to $3 per cwt) and more in some cases recently. Some buyers believe another substantial increase in scrap tags may be needed to trim the disparity, although upcoming holiday mill maintenance outages also could help to firm prices by reducing immediate availability.