Ferrous scrap prices in the Midwest soared to their highest
levels since May 2012 as supply concerns caused buyers to
accept sellers terms this month.
leading into November had set the stage for increases of
between $20 and $30 per gross ton from the previous
However, late October
and early November attempts by mill buyers to secure scrap at
increases of $20 per ton were immediately turned away by
suppliers, who insisted on much higher increases for all grades
After a brief impasse,
most mill buyers in the Detroit region opened Novembers
trading week with bids that were $30 per ton higher than the
previous month. The $30 increase proved to be the sweet spot
for suppliers, who responded favorably with no push for larger
supply of industrial scrap, market participants said apparent
tightness in the supply of obsolete grades helped lift prices
for all grades, including industrial and shredded scrap.
Mills in the St.
Louis, Chicago and Indiana regions were quick to follow
Detroits buyers, and within three days a large majority
of ferrous scrap in the Midwest had traded at or near $30
For the few mills that
stepped into the market a day after most Midwest mills had
locked in their scrap tons, the market proved dearer.
As some mill buyers
continued to build inventory for December after completing
Novembers buying program, two producers who entered late
last week to book scrap for November were greeted by seller
offers $30 to $35 higher for grades like heavy melt, shred and
plate and structural scrap.
Healthy demand from
most mills in the region and the seasonal winter uptick in
prices due to possible supply constraints brought on by cold
weather resulted in the Midwest emerging as Novembers
strongest market across the country.
participants were undecided on whether strong demand from the
mills was due to good order books or a play to book more scrap
that can cover them for a week or more in December should
suppliers push for another big increase.
seem to be any lack of demand in the Midwest. Its hard to
tell whether thats due to real demand or a sense that the
mills dont want to run short going into December," one
Midwest Ferrous Scrap Index for No. 1 busheling settled Nov. 11
at $431.18 per ton, up $30.02 from $401.16 in October, while
AMMs Midwest Ferrous Scrap Index for shred
settled Nov. 11 at $389.01 per ton, up $30.91 from $358.10 in
AMMs Midwest Ferrous Scrap Index for No. 1 heavy
melt settled Nov. 11 at $373.69 per ton, an 8 percent increase