Average prices paid by steel mills for steel and iron scrap in July soared from $42 to $80 per ton, depending on the grade of scrap and the region.
Spot market buyers, as indicated by transaction pricing compiled by Management Science Associates Inc. (MSA) for its Raw Material Data Aggregation Service (RMDAS), paid significantly more for prompt industrial composite grades in particular in July.
That grade, which includes new production scrap such as #1 busheling, #1 bundles and #1 factory bundles, commanded $60 more per ton in the South and $80 more per ton in the RMDAS North Central/East region. (That region includes mills in Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, Wisconsin and the northwest corner of Indiana.)
Also rising, but in a range from $43 to $51 per ton, was the RMDAS #2 shredded scrap grade, defined as shred containing above .17 percent copper content.
July transactions also revealed mills paid more for #1 heavy melting scrap (HMS), in a range from $42 to $51—almost identical increases seen for shredded scrap.
The boost in prices paid for prompt grades brought that figure to nearly $300 per ton, a level that has not been reached since September off 2008, when prices were on their way down from the historic peak reached in the spring and summer of 2008.
Supply shortages of scrap—and busheling in particular—are being cited by recyclers as a predominant factor in the price hike. With appliance production in a slump and auto production in a slump combined with a model changeover phase, factory stampings are hard to come by.
Global demand for scrap also has played some role in the price revival, as steelmakers in June produced more crude steel in June of 2009 than in May or April.
After world crude steel production for the 66 countries reporting to the Brussels-based World Steel Association (Worldsteel, at www.worldsteel.org) increased by 7 percent in May compared to April, a further 4 percent increase in June brought global steel production for the month to nearly 100 million metric tons.
Global production remains well below what was being churned out one year ago, when more than 118 million metric tons of crude steel was produced in June 2008.
But in almost every geographic region of the world, more steel was produced in June versus May. Among the larger nations of the world:
- China produced nearly 3 million more metric tons in June compared to May
- Japan demonstrated a 400,000-metric-ton monthly increase
- Germany produced nearly 300,000 metric tons more
- Russia’s output increased by more than 200,000 metric tons
- The United States produced about 100,000 metric tons more.
Not all nations demonstrated increases, however, as South Korea, India and Spain showed slight decreases in production, according to Worldsteel.
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),