The January ferrous scrap trade in the United States has officially begun, with mills in Detroit entering the market and successfully securing prime scrap and secondary scrap at a $30-per-gross-ton increase from December levels.
Prices for No1 busheling and shredded scrap in Detroit will increase to $290 per ton and $285 per ton respectively in January. It is still unclear where prices for steel turnings are headed.
In Chicago, mills have not made any moves for January, but one seller expects mills in the region to follow the Detroit mill and raise prices by $30 per ton for all scrap grades.
“The [Chicago] mills will be able to buy what they need at up $30 per ton. Dealers will offer more material, and I expect the shredders will sell hard,” the seller said.
Even though the weather has been mild this winter, scrap flows have fallen short of expectations despite the price increases seen in November and December.
US ferrous scrap export prices inched up in a fresh cargo sale to Turkey on Friday January 3; shredded scrap reached $306 per tonne in that sale.
“There really isn't that much scrap out there without the exporters offering any tons. The Turks still need January-shipment cargoes, and I doubt the exporters have enough material laying around,” a processor said.
Strong expectations for January and tight supply conditions prompted some shredders in the Midwest and Ohio Valley to increase scale prices for feedstock by $15-22 per gross ton in order to coax more material into their yards.
Fastmarkets' price assessment for steel scrap shredder feed, fob Midwest rose to $112.91 per gross ton on Monday January 6, up from $108.67 per ton a week ago. The assessment for shredder feed, fob Ohio Valley increased to $121.29 per ton from $113.50 per ton in the same comparison.
In the Southeast, the shredder feed price assessment slipped to $119.64 per ton after climbing to $120.65 per ton a week ago; the price had risen due to a temporary price increase at a major shredder for a promotion that was open to the public.