NEW YORK Midwest scrap markets are expected to settle Dec. 6 as steel mills and dealers indicated they were approaching agreeable price levels for pending volumes.
Of the sporadic trading reported across different Midwest regions, market participants said that cut grades continued to trade at increases of $20 per gross ton, with shredded scrap gaining between $25 and $35 per ton depending on the prior month price and delivery location.
Some sources said prices for prime grades could rise up to $10 per ton on late trades despite several trades reported at prices unchanged from November. Dealers attributed their push for gains in prime scrap to the larger-than-expected price increases recorded by shredded scrap.
Others said prices were bound to increase during the week and speculated there could be some late strengthening in Indiana for prime scrap tags.
"Primes are already up $10 per gross to two large producers. The people that sell last in December and first in January will be the smartest," one Midwest scrap dealer said. "Theres still reluctance at some mills and I think they need to have their heads examined. Their orders are good and mills are doing better."
A few mill buyers who have reportedly concluded a majority of their December purchases agreed.
"I would anticipate that mills come up short on shred and cut scrap and end up putting some upward pressure on primes. I wouldnt be surprised at all if (some mills) come back in to buy primes ... at up $20," one buyer said.
In Detroit, several sources said prime grades had traded at unchanged prices, with cut grades up $20 per ton and shredded scrap up $30.
Across the Midwest, sources cited imminent winter storms as a contributing factor to rapidly strengthening sentiment.
"Theres no inventory on the ground. Were going to end up with three weeks of production on inbound scrap. And if you dont have it, how are you going to sell it?" a scrap dealer said.
Meanwhile, mill buyers in Pittsburgh and Cleveland are reportedly experiencing sticker shock with shredded scrap sales up $35 and $40 per ton, respectively, from November prices.
In the Carolinas and Alabama, markets began trading late Dec. 5 with most grades headed for a $10 per ton increase, with dealers pushing for larger gains on shredded scrap.
Mills in Alabama could likely succeed with raising prices only $10 per ton in December due to down times scheduled at some plants, sources said.
In the Carolinas, where mills have also scheduled outages this month, tags are likely to follow trends established in Alabama, sources said.
"I sold a little to one mill at up $10 and am happy to hold back tons, sensing the market will be stronger in January," a shredder source selling into the North Carolina market said.