Holiday Lift for Ferrous Pricing

Sellers of ferrous scrap received some holiday cheer by receiving up to $30 more per ton for shredded and prompt industrial grades of scrap in December. (Click here to view the prices)

Reversing a two-month slide, mills paid some an average of from $13 per ton more for HMS #1 in the South to $33 per ton more for Prompt Industrial Composite grades in the North Midwest. (Those wishing to see a map of the regions can go to http://rmdas.msa.com.)

December buys in many regions showed gains of from $28 to $33 per ton, according to figures compiled by Management Science Associates’ (MSA) in its Raw Material Data Aggregation Service (RMDAS).

The RMDAS mill purchasing numbers showed shredded scrap trading at an average of $30 per ton higher in December versus November, with the U.S. average for the grade kicking above $300 again to $307 per ton.

The price boost may be followed up by another in January, some recyclers are speculating, because of the slowdown in generation that is likely to occur in late December.

 “The week between Christmas and New Year’s, nothing really happens,” says a recycler in the Great Lakes region. “A lot of plants that generate scrap are not even running, and some processing yards pare down to a skeleton crew,” he says. “December is just a short month with less time to buy.”

A recycler operating in the Western United States is more optimistic about scrap flow prospects for the foreseeable future.

In his market, new housing subdivisions continue to be built (generating scrap) and the population continues to grow, providing more people to generate obsolete vehicles and appliances. “It’s explosive right now,” he says of the regional economy, as well as the amount of scrap that can potentially flow across his scales.

With both global and domestic steelmaking figures heading into 2008 with considerable strength, recyclers will need the flow to sustain itself through the short work weeks and poor road conditions that factor into the market in December and January.

The Raw Material Data Aggregation Service (RMDAS) Ferrous Scrap Price Index is based on data gathered from a statistically significant compilation of verified ferrous scrap purchase transactions.

RMDAS is a service of Management Science Associates Inc. (MSA), Pittsburgh. Those seeking more information about RMDAS can contact MSA’s Ralph Pinkert at 773-588-1199 or via e-mail at RPinkert@MSA.com.