NEW YORK A mixed market for shredded steel scrap in the Midwest has resulted in varied trends across key regions as early transactions fared better than late ones amid weakening sentiment.
Market participants said shredded scrap sold into Indiana this month at increases of between $10 and $15 per gross ton from June, while shredded transactions in the Chicago area were reported at increases of $5 per ton to $15 per ton depending on last months individual price levels.
Early week sales were reported at higher prices than late week sales, with some suppliers still looking to place shredded scrap late in the week.
"Mills are now offering sideways prices on shred, which is concerning when youve got others that have gone up $10 or $15 (per ton). It makes it very uncompetitive when securing feed stock," one supplier said. "At sideways for shred, it would be just a few dollars above No. 1 heavy melt, which makes no sense. It shouldve been the other way around."
A second supplier said mill buyers pushed for lower prices on shred after securing their main needs at higher prices; a move that has apparently worked well for mills outside the Chicago area.
"With the upside potential for the market going forward less that the downside risk going forward, mills knew that dealers wouldnt hold back scrap at sideways numbers, so why pay more?" he said.
The AMM assessment for shredded auto scrap in Chicago was $375 per ton July 9, up $10 per ton from June, while No. 1 heavy melt inched up $2 per ton to $363 per ton after reportedly trading in a range of $360 to $365 per ton.
Meanwhile, AMMs price for No. 1 busheling held firm at $397 per ton, while No. 1 bundles remained unchanged at $392 per ton.
A third supplier said that mill buyers will also fancy their chances of securing late tons of busheling at possibly weaker prices as supply outstrips demand.
"The mills decided early this week that they didnt want to increase their prices on prime grades. They knew that there was a lot of material both in inventory in the yards and coming in from industrial accounts. With more material available than they needed to buy, they decided to go sideways. Then once they bought their program by close of business (July 7), they lowered their prices," he said.
Meanwhile, July prices in the Southeast region were unchanged across the board, disappointing scrap sellers who had anticipated higher prices. A couple of early sales before the Fourth of July weekend were transacted at higher numbers but an abundance of scrap was offered after the holiday, market participants said.
Initial talk was that mills in Alabama and the Carolinas would be willing to pay $10 per ton more than Junes prices to secure July needs, but prices have stayed flat.
Like the Midwest, the Southeast market showed signs of retreat by late July 9, with mill-owned brokerage firms quoting lower numbers to scrap companies that still had tons to place. Mill buyers reportedly received offers from scrap brokers that were not regular suppliers, indicating that supply is sufficient.
The market in the Ohio Valley was close to settling, with prime grades trending sideways and shredded prices poised to increase between $10 and $15 a ton.
Lisa Gordon, Pittsburgh, contributed to this story.