Steel Mills

SSAB Holds RMS Even as Scrap Prices Decline

July 14, 2022

SSAB Americas will hold its raw materials surcharge, or RMS, on #1 Heavy Melting Scrap (HMS) unchanged effective July 31 on all spot orders and all contractual agreements.

SSAB

The Mobile, Ala-based steelmaker said the sideways move was due to a declining HMS #1 price tag, which is currently valued at $351 per gross ton, and below the $465 per gross ton threshold.

The note applies to both US and Canadian customers, who will see a $0.00 per net ton surcharge in August.

SSAB implemented a raw materials surcharge, or RMS, in March to mitigate potential losses due to “extraordinary market pressures brought on by recent global events” – a response to the war in Ukraine.

The steelmaker is basing the calculation of the RMS on the SteelBenchmarker™ #1 HMS index value, USA, East of the Mississippi as published on the Thursday following the second Monday of the month.

SSAB said any amount exceeding the threshold will be applied at the time of shipment, but when the index is below the threshold, no surcharge will be applied.

SSAB Americas is a subsidiary of Swedish steelmaker SSAB. The company operates plate mills in Mobile and in Montpelier, Iowa.

Plate prices have been largely unchanged over the past four weeks, bucking the trend seen in domestic sheet prices. Plate prices are averaging $1,800 per ton, according to SMU’s latest check of the market on Tuesday, July 12, at nearly twice the premium to hot-rolled coil (HRC) tags.

By David Schollaert, David@SteelMarketUpdate.com

David Schollaert

David Schollaert is a senior analyst for Steel Market Update. David joined SMU after more than a decade in the metals and mining industry in a myriad of different roles. Much of his early experience and expertise were within the coverage and analysis of steel-making raw materials and served previously as senior editor of the CRU Prices Service. Most recently, however, before his return to market analysis, David held roles as a metals buyer and an operations manager for raw material suppliers. Based in CRU’s Pittsburgh office, David can be reached at david@steelmarketupdate.com or 724-720-1008.