Scrap Prices Rise Boosted by Export Demand

He said Detroit mills entered the market last week at prices up $60 per gross ton on prime grades and up $30 per gross ton for obsolete grades.

“So this is the second month in a row of increasing scrap prices,” he continued.

Another executive noted that shredded and other obsolete grades were higher by $30 per gross ton in the East and up $40 per gross ton in the Ohio Valley.

“The larger jump in the Ohio Valley for shredded was in part to ‘catch-up’ from lower prices there in December,” the executive said, adding that in the South, shred traded higher by $30-$35 per gross ton.

Additionally, prime scrap increases were +$50-$60 per gross ton, depending on the region, the executive said. “The higher end of the increase came in the Midwest due to restocking needs.”

SMU’s scrap prices for January are as follows:

• Busheling at $420–460 per gross ton, averaging $440, up $60 from last month

• Shredded at $410–440 per gross ton, averaging $425, up $35 from last month

• HMS at $330–370 per gross ton, averaging $350, up $35 from last month

Looking to February, both executives saw a sideways market as a possibility. 

The first executive sees February as sideways to up “since mills had trouble filling their needs, and the weather has caused problems.”

The second executive agreed that the talk is a sideways February, “which would be unusual as February is usually a down month following January’s global restocking period.”

“But this year, it remains to be seen whether export demand sustains (it well may), and how much domestic flows improve. They will, but will it be enough?” he added. 

PSA: SMU members can chart various scrap prices as far back as 2007 using our interactive pricing tool.

By Ethan Bernard, Ethan@SteelMarketUpdate.com