US average Shredded scrap prices rise to $430.25 per long ton in January

UNITED STATES February 11 2014 10:09 AM

NEW YORK (Scrap Register): United States average domestic Midwest shredded (del. mill) scrap prices rose by 2.5% month-on-month to $430.25 per long ton in January this year, said The Steel Index in a monthly report.

According to TSI, the pervading story for the past three months has been of “thrust and parry” between the steel mills, brokers and yards, with the oft quoted claim of a supply crunch heard most amongst the yards. Good order books at the steel mills and a growing US economy supported these claims, with scrap rising over $80 a long ton since September 2013.

The US Midwest shredded scrap market for January can be split into two halves. Early January expectations anticipated scrap deliveries in the US rising as high as $40 a long ton above the December average of $420 per long ton. Inclement weather and further fear of a supply crunch supported this view to some extent. In the event, steel mills and scrap yards settled on a smaller $20 a long ton rise during ‘buy-week’ with some evidence of more scrap available than previously thought.

Then it all changed. Though the US was suffering some of the coldest weather it has ever seen, mills were increasingly hearing of far more scrap available than previously expected. A progressively slower export market and a relative lack of orders led to a mid-January correction. Scrap imports from Canada and Europe put further pressure on the price, with TSI’s shredded index falling 2.1% in the week ended January 17th and holding steady for the rest of the month.