The brakes were tapped on plummeting ferrous scrap prices in December, as mills in the United States paid from about $70 to $90 more per ton for buys in the spot market.
In the December buying period, prompt industrial scrap, shredded scrap and No. 1 HMS all moved up in value, according to transaction pricing compiled by Management Science Associates Inc. (MSA) for its Raw Material Data Aggregation Service (RMDAS).
National averages reveal the prompt grades moving back up the most sharply, with the average spot buyer paying $96 per ton for new production scrap such as No. 1 busheling, No. bundles and No. 1 factory bundles.
Shredded scrap prices took a healthy hike of $78 per ton as determined by the national spot buying average, while No. 1 HMS moved up $72 per ton on average.
In the North Midwest market region (Illinois, northwestern Indiana, Wisconsin, Minnesota, Iowa, Missouri, Kansas, Nebraska and the Dakotas), No. 2 shredded scrap enjoyed the biggest increase, jumping $85 per ton, more than the prompt industrial grades in that region.
The South region was more reflective of national trends, with the RMDAS Prompt Industrial Composite grade moving up $96 per ton while shredded scrap increased just $70 per ton. In that region, however, No. 1 HMS was bid up by spot buyers some $90 per ton more than November pricing—well above the national average.
In the December buying period measured by RMDAS, the Prompt Industrial Composite grades traded at $251 on average nationally. The $96 per ton increase offered relief a nice boost from the $156 per ton paid in November and, perhaps more importantly for scrap processors, indicated that the market was again capable of moving back in the upward direction.
The December change in momentum does not appear to have been caused by renewed strength in steel mill marketing schedules, if the most recent steel production figures are any indication.
The World Steel Association (www.worldsteel.org), figures for November show global steel production having dropped by some 10 million metric tons compared to the month before.
Nations that produced less steel in November compared to October include the United States, Russia, Germany, Brazil and South Korea. China and Turkey’s production remained relatively stable in November.
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),