LONDON Shredded scrap prices have recorded the largest gains in key Midwest markets, with prime grades the weakest in trading for December.
Market sources indicated that several Midwest steel mills have concluded their buying programs for the month, with a handful expected to wrap up their purchases during the second week of December.
Detroit- and Chicago-area mills trended sideways on No. 1 busheling and raised prices for plate and structural scrap by $20 per gross ton compared with November levels, while shredded scrap tags jumped $30 in Detroit and $25 in Chicago.
AMMs price assessment for shredded scrap in Chicago leveled out at $415 per ton, while the assessment for Detroit finished at $414 per ton.
Meanwhile, No. 1 busheling prices in Chicago and Detroit were unchanged from November at $430 per ton.
In eastern Indiana some sources reported increases in sales of prime grades, with prices ranging from $425 to $445 per ton.
In a single month, the price differential between No. 1 busheling and shredded scrap has dropped to between $15 and $20 per ton from $40 to $45 per ton, which several sources said will encourage traditional shredded scrap consumers to push for the better quality prime scrap in the coming weeks.
"I dont think shredders should have been up $30. It got a lot of hype and people went crazy with it. I dont think youd get any more shred at up $30 than you would at up $10," one mill buyer said. "Typical price differentials should be $20 to $30, so when the gap comes to $20 and under then the mini-mills start looking at busheling," he said.
Among the other heavily traded scrap grades, No. 1 heavy melt prices recorded different trends in Chicago and Detroit, as increased competition in Chicago sent heavy melt prices up $23 per ton to $400 for December, while heavy melt prices in Detroit increased $18 per ton to $382.
Market participants said this months trading had been among the most active in recent memory.
"It gained strength throughout the week. Dealers are naming their price at this point and are happy to hold anything that doesnt sell until January," another mill buyer said.
As expected, many mills have lowered their overall buying volumes this month due to holiday shutdowns.
However, the drop in demand wasnt sufficient enough to prevent prices from rising due to apparent supply-side concerns on obsolete grades of scrap.
"Even though the demand is not great, the supply side is weak and dealers are reluctant to oversell, and some will hold back scrap in a short month," one dealer said.