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Ferrous Scrap on the Gaining Front

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by - 5/23/2016 5213 Views

Flat Rolled Steel Produce on steady demand.

It was a third consecutive gain in May for the Midwest ferrous scrap as steady demand from flat-rolled producers worked to lift prices once again. Most steelmakers throughout the Midwest readily agreed to pay a $30-per-gross ton premium to secure No. 1 busheling, which is showing signs of becoming scarce.

The price increase was more modest than that logged by prime material in April, and fell short of the $40- to $60-per-ton, that was rumored to be in the works. Sellers believed that the domestic market would follow signals from the export market, which increased $90 per ton within one month. Busheling traded at $270 to $280 per ton throughout the Midwest. The largest volume of prime scrap was again placed by the handful of primary buyers that purchased more than 300,000 tons for May delivery.

The market exhibited different dynamics this month, including weaker demand in Chicago and a strengthening in demand for prime ferrous scrap, which has now eclipsed demand for lesser grades. Obsolete grades of scrap were the most in demand earlier in the year, but the large price increases seen recently have managed to restore flows of shredded and No. 1 heavy melting scrap. “Obsolete scrap and demo projects have both improved with the better prices,” one Midwest dealer said.

One mill buyer noted recently that electric-arc furnace flat-rolled steelmakers have been running at nearly 100-percent capacity for three months, gobbling up busheling in the market. Sellers agreed that the overhang of prime scrap has been depleted and mills are now relying on what is generated each month. Shredded ferrous scrap is now selling at a slight premium to busheling, but the spread between the two grades has narrowed significantly.

Chicago has seen an about-face in the past60 days, with three of the mills buying 50 percent or less of usual purchases and pulling 150,000 tons of demand out of the market for May. “Chicago is now the weakest part of the country,” according to a source there, noting that the combination of scrapyards' improved inflows and weaker demand from three consumers worked to keep prices from overheating.

In March, Chicago stunned buyers after the city was caught up in an overnight runaway market that left mills scurrying for material. While Detroit and Chicago mills both paid a $30 premium for prime scrap in May, the cities diverged on the cuts grades. Detroit mills were able to keep a lid on heavy melt, purchasing the grade at a $15-per-ton increase, but Chicago mills paid an increase of $20 for the material.

However, one Midwest seller noted that some mills were showing extreme caution and doing their homework before making deals. Other mills tried unsuccessfully to buy at lower prices than the levels settled, but raised offers after finding few takers.

Midwest ferrous scrap indices settled at $274.88 per ton for No. 1 busheling, up 12.6 percent from $244.08 per ton previously that for shredded scrap at$276.04 per ton, up 7.5 percent from $256.70 per ton; and for No. 1 heavy melt at$250.94 per ton, up 8.8 percent from $230.69 per ton.

Category : Metal

Tags : Ferrous Scrap Price, Flat Rolled Steel Scrap, Ferrous Scrap Market, Shredded Ferrous Scrap

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About Georgy Abraham

As the bright morning of 28th May dawned in the year 1972, in the fulfillment of time according to the plan & will of Almighty Godbrought me forth into this world and I was brought up & educated in Orissa. My parents provided me with the best of education in an English medium school with high standa .... more info


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