UNITED STATES June 18 2014 10:18 AM
NEW YORK (Scrap Register): United States domestic shredded scrap index monthly average fell by nearly $17 along ton or 4.1% month-on-month in May, as a scrap supply overhang weighed on the market.
“Buy-week” for May saw the price of shredded scrap fall sharply, with US Midwest shredded index (delivered mill) dropping by $15 a long ton in the first week of the month to $387 a long ton
It was a story of mixed fortunes for many, with pricing falling as the week went on and buyers who bided their time rewarded for their patience. Buyers in the Ohio region were the first to blink, perhaps out of necessity, and initially secured shredded material for $395 a long ton.
As it became clear that there was a glut of shredded material, and sellers sought to ensure they did not miss out on sales, pricing dropped sharply over the course of the week with shredded material eventually changing hands at $385 a long ton.
A significant lack of export activity by US East Coast suppliers to Turkey and beyond during the month helped to exacerbate the situation. These suppliers sought to offload material domestically against a backdrop of weak Turkish demand and better margins on offer in the US market. This had the end result of further increasing scrap availability, thus forcing suppliers hands in negotiations.
It was a different story for prime grades, which traded at levels flat to that of April’s pricing, as supply of these grades was not in such plentiful supply. This in turn has helped to open up a large spread between prime and obsolete scrap.