NEW YORK (Scrap Register): United States domestic shredded scrap index monthly average dropped almost $13 a long ton or 3.2% month-on-month in March, as a glut of supply early in the month dented sentiment, as per the latest figures released by the The Steel Index.
According to TSI, the traditional March 'buy-week' in the US scrap markets brought about a US$16/long ton fall in TSI's US Midwest shredded index (delivered mill). Talk in the run up to the week was of a glut of supply, with the problem being exacerbated by US East Coast recyclers offering material inland. Initial chatter was of a $20- 25 a long ton price fall, but what transpired was a much smaller decrease supported in particular by a shortage of shredded material.
Bearish-to-neutral sentiment continued to reign mid-month, with pricing mostly sideways. Low scrap prices were not enough to stimulate significant flows into yards, whilst finished pricing was being hurt by an increase in imports, meaning the market was left in an almost suspended state. Participants were however confident that a bottom had been found in the market for the medium term, and that prices were unlikely to drop further.
The buy-week for April brought about a swing in market sentiment. Buyers in the Ohio Valley region initially secured material well above $400 a long ton, whilst those who waited on the side-lines until the end of the week found recyclers willing to part with shredded material at around $400 a long ton. The reasoning given for the rising prices was said to be low scrap inventories, with several mills keen to secure prompt deliveries.