US Shredded Scrap prices monthly average plummet during November

UNITED STATES January 04 2016 3:47 PM    

NEW YORK (Scrap Register): The  monthly US shredded 10-day average index for November was $166 a long ton. The  monthly average of TSI’s established weekly US domestic shredded scrap index  (delivered Midwest mill) fell by $15.05 a long ton or 8.3% month-on-month to  $166.20 a long ton in November. The weekly price of $166 a long ton marked  another record low for the index, said The Steel Index.

According to TSI,  this index reflects the volume-weighted average price of transactions completed  during the first ten days of the month. NASDAQ OMX has listed a US shredded  scrap futures contract, settled using this 10-day average index since September  7 this year.

Prices fell  for the fifth consecutive month as strong export volumes into Turkey were  counteracted by a continued lack of demand from US domestic mills.

Any  sudden up-tick in mill utilization rates still looks unlikely in the short-term  with the wintery weather in the Midwest further exasperating  this.

Indeed, as winter sets in, yards are looking at possible price  hikes, particularly since many mills are carrying low inventory. However, scrap  is being withheld from the market and therefore any significant price rise would  be halted once this excess material comes back into the market.  

Moreover, the idling of Warren Steel Holdings Ohio mill freed up more  scrap in the middle of the month, thus putting even more scrap back in the  market.