Ferrous scrap buyers were able to buy shredded and heavy melting steel grades for several dollars per ton less in early May, but as the month ended the two month pause in pricing seemed about to end.
According to the Raw Material Data Aggregation Service of Management Science Associates of Pittsburgh said that in the early May buying period, mill buyers were successful in obtaining shredded scrap for about USD 20 less per tonne compared to April.
While shredded scrap pricing lost USD 18 per tonne in value in May and No 1 HMS prices dropped USD 14, prompt grades held their value, dropping just USD 4 per tonne on average nationally.
By mid-May, recyclers were reporting two factors likely to cause prices to revive again as mills made their June purchases: flooding hampering barge traffic on the inland waterway system and renewed interest from exporters when prices dipped in April and May.
Delegates attending the Ferrous Division Meeting at the 2011 Bureau of International Recycling World Recycling Congress heard mostly positive things about the health of the steel and ferrous scrap industries.
Among those offering reports at the late May event was Blake Kelley of Sims Group Global Trade Corp, New York, who noted that scrap prices in North America declined in early May but were rebounding as the month ended.
Kelley remarked regarding supply constraints that “There are significant transportation problems both on the inland river system due to severe flooding and high water conditions, while the railroad system is struggling to perform as a result of a fully utilized railcar fleet. Difficulty with both transportation modes is frustrating dealer efforts to complete [delivery] commitments.”
On the demand side, Kelley noted that mills in the United States are running at about 73% capacity, with flat-rolled steel in greater demand than long products.