Ferrous price decline starts H2 with a thud
Ferrous price decline starts H2 with a thud
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Steel mills in the United States paid some 23 percent less for prime grades of ferrous scrap in July compared with June, according to transactions tracked by the Raw Material Data Aggregation Service (RMDAS) of Pittsburgh-based MSA Inc.
Purchases made from June 20 to July 19 show steel mills paying an average of $500 per ton to procure prime grades. That represents a 23 percent drop from the $650 per ton average recorded from May 20 to June 19.
Prices for obsolete grades tracked by RMDAS —No. 2 shredded and No. 1 heavy melting steel (HMS) scrap—fell by just $34 and $40 tons respectively. Those July price drops represent a 7.1 percent decline in shred’s value and a 10.1 percent drop for No. 1 HMS.
The previous drops in ferrous pricing in June caused some speculation the market may have hit its bottom. Unfortunately for sellers of ferrous scrap, later bids from overseas buyers and unenthusiastic domestic buying in early July proved the floor had not yet been reached.
After lower June pricing trends were made clear by RMDAS tracking and Davis Index surveys, one ferrous trader told Recycling Today a one-two punch of rising fuel costs and less money received at the scale “is causing some peddlers to just give up and stay at home.”
Although demolition projects continue to bring plate and structural and HMS grades into yards, a downward trend in ferrous prices is almost always followed by a downturn in demolition activity as property owners and contractors hold off while waiting for a price rebound.
A scrap processor in the Great Lakes region refers to the recent market as “stressful” and fears the downward momentum for prime grades may not have ended. “I think primes still have another $100 to go,” he says
As the trader indicated, the processor also sees a shift in the supply landscape that could eventually contribute to a price rebound. “Flows are definitely down,” he remarks. “I’d say there has been a 20 to 30 percent reduction.”
On the demand side, Washington-based American Iron and Steel Institute (AISI) says in the week ending July 16, 2022, steel production in the United States was down 0.6 percent from the previous week and had dropped 6.7 percent compared with the same week in 2021.
Year-to-date steel production in the U.S. through July 16, 2022, stands at 49.35 million tons, which is down 2.5 percent from the 50.62 million tons made during the same period last year.
The export market remains unsteady, with East Coast scrap shippers likely having noticed that steel output in Turkey has dropped by 2.8 percent year on year. West Coast shippers, meanwhile, have likely felt South Korea’s 3.4 percent decline in year-to-date output.
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Source: Recycling Today
Ferrous price decline starts H2 with a thud
<![CDATA[Steel mills in the United States paid some 23 percent less for prime grades of ferrous scrap in July compared with June, according to transactions tracked by the Raw Material Data Aggregation Service (RMDAS) of Pittsburgh-based MSA Inc.Purchases made from June 20 to July 19 show steel mills paying an average of $500 per ton to procure prime grades. That represents a 23 percent drop from the $650 per ton average recorded from May 20 to June 19.Prices for obsolete grades tracked by RMDAS —No. 2 shredded and No. 1 heavy melting steel (HMS) scrap—fell by just $34 and $40 tons respectively. Those July price drops represent a 7.1 percent decline in shred’s value and a 10.1 percent drop for No. 1 HMS.The previous drops in ferrous pricing in June caused some speculation the market may have hit its bottom. Unfortunately for sellers of ferrous scrap, later bids from overseas buyers and unenthusiastic domestic buying in early July proved the floor had not yet been reached.After lower June pricing trends were made clear by RMDAS tracking and Davis Index surveys, one ferrous trader told Recycling Today a one-two punch of rising fuel costs and less money received at the scale “is…