NEW YORK Ferrous scrap tags in Detroit inched higher this month as a push to normalize price differentials between prime and shredded scrap coupled with tight supplies of plate and structural scrap allowed prices for obsolete grades to rise.
Mill buyers in the Detroit area were again the first to buy this month and found little resistance to their bids July 7.
Market participants reported increases of $5 to $10 per gross ton on obsolete grades like No. 1 heavy melt and 5-foot plate and structural (P&S) scrap, with increases of $10 to $20 per gross ton reported on shredded scrap, depending on the last price transactions in June.
Prime scrap grades like No. 1 busheling and No. 1 bundles, meanwhile, traded in Detroit at prices unchanged from June, according to buyers and sellers. Buyers reported no resistance to flat pricing on prime scrap despite some dealers previously saying that they would hold out for increases (amm.com, June 25).
"The availability of busheling is a bit better than expected with demand weakness in the Chicago area," one mill buyer said.
Obsolete scrap grades, however, strengthened in the Detroit area as early buyers of shred in June were able to secure prices lower than consumers who came into the market later.
"Scrap suppliers are getting some of that back this month," said the buyer, while a trader noted that heavy melt and P&S benefited from the increase in shredded prices and a tighter supply of P&S.
"P&S is probably the most difficult grade to purchase this month," the buyer said. "I know a couple of big demolition jobs ended in June. Others have been slow to develop."
A buyer for a second steel producer said that P&S also has been hard to find in Illinois and Indiana. "HMS, shred and bush were very plentiful on offers into us this month," he said. "The grade that is hard to find right now seems to be P&S. Im just wondering if the big demo jobs are all being backed directly by mills and they arent getting marketed out to the mills like they used to."
In Detroit, AMM assessed 5-foot P&S at $375 per gross ton July 8 and No. 1 heavy melt at $363 per gross ton, up $7 and $8, respectively, from June.
AMMs assessment for shredded scrap in Detroit stood at $375 per ton July 8, up $15 from June, while No. 1 busheling was unchanged at $398 per ton.
In Chicago, market participants said they were deep in negotiations as several mills were pushing for unchanged prices on all grades while dealers pushed for increases on at least shredded scrap.
"(One mill) has a reduced buy and is trying for sideways. I believe this will fail. (A second mill) is running well and has little scrap and most certainly will have to pay up to cover and to get deliveries. I think at least up $10 is most likely to happen on shred," one Chicago-area dealer said.
A second dealer speculated that prices could increase to the east of Chicago while Chicago-area mills trend sideways.
However, other market participants in Chicago and Indiana reported obsolete and shredded scrap trades into Indiana at increases of $10 to $15 per ton.
Deals in the Carolinas and Atlanta were done sideways across the board. In Alabama, cuts and prime grades were selling at sideways numbers, and shredded scrap was on track to go unchanged as well. The market has been slow to settle as some dealers are holding out for higher numbers.
In Pittsburgh and Cleveland, cut grades and prime were sold at sideways numbers, while shred was poised to rise between $10 and $15 per ton. Shred deals were done at up $13 to $15 per ton in Cleveland and up $15 in Pittsburgh.
The ferrous scrap market in Philadelphia was significantly impacted by a breakout at ArcelorMittal USA LLCs Steelton, Pa., mill (amm.com, July 7). The breakout, which prompted the mill to bring forward a maintenance shutdown previously scheduled for August, significantly reduced the facilitys scrap buys this month, as Steelton was originally expected to have "a pretty big buy in July," according to one dealer source.
As such, trading activity in the Philadelphia market has been somewhat slow to develop through the first week of July. While obsolete grades traded predominantly sideways from last month, there was some fluctuation across prime grades, with multiple sources reporting busheling trading up about $10 from June.
Lisa Gordon, Pittsburgh, and Rey Mashayekhi, New York, contributed to this story