Midwest ferrous scrap prices plummeted this month as mill
buyers welcomed a push by exporters to send domestic prices
With a strong dollar
making bulk export transactions unviable to several countries,
exporters were left with large volumes of unsold scrap despite
winter weather reducing scrap flows, market participants
With Turkey staying
away from U.S. shores by mid-January, it became clear that
exporters would offer scrap inland. From the East Coast,
shredded scrap was expected to make its way into the Ohio
Valley region. From the Gulf Coast, Mississippi River mills
were expected to be the benefactors. And from the West Coast,
some sources expected scrap to make its way to the outer
borders of the Midwest.
In addition, steady
activity at manufacturing plants around the United States meant
that prime scrap would take the biggest hit in February. When
reports of an imminent onslaught of supply from an
under-utilized Canadian prime scrap market made the rounds in
late January, prime scrap such as No. 1 busheling was doomed,
some sources said.
It all came together
as trading began Feb. 5. Despite some dealerswho saw
January scrap flows into their yards drop more than 50
percenthoping for some moderation in the inevitable price
drop, reports of East Coast sales into Indiana and northern
Ohio at depressed prices and the sheer volume of scrap on offer
from exporters was all the ammunition Detroit-area mills needed
to send prices crashing by $30 per gross ton on all grades (
amm.com, Feb. 5).
"Towards the end of my
buy there were people offering me shred and primes at down $40.
It was a very weak market," one mill buyer said.
Over the following few
days, mills in Chicago, Indiana and St. Louis started booking
their obsolete grades at down $30 per ton as dealers finally
caved in to buyer pressure. Shredded and prime scrap sales took
a little longer as one major producer decided to sit out of the
market in most regions by bidding for scrap at down $40, while
several other millsunsure of just how much they could
drive down prime scrap pricesdecided to wait it out (
amm.com, Feb. 7).
Other mills picked up
prime scrap at prices that were down $30 to $40 per ton, with
prices getting weaker as the week progressed. Mills waiting to
fix prices on prime scrap are expected to do so within the next
few days, and most sources expect prices to largely finish
within the above range.
Midwest Ferrous Scrap Index for No. 1 busheling settled Feb. 10
at $409.09 per gross ton, down 8 percent from $444.86 last
prices meant further erosion between busheling and shredded
scrap prices, which narrowed to $3 per ton as
AMMs Midwest Ferrous Scrap Index for shredded
scrap settled Feb. 10 at $406.10 per ton, down 7.5 percent from
$438.92 in January.
Midwest Ferrous Scrap Index for No. 1 heavy melt settled
Feb. 10 at $385.86 per ton, down 7.7 percent from $417.95 in
the same comparison.