Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The ferrous scrap trade for August was active on Thursday in the US, following early Midwest price drops of $20/gt for primes throughout the region. Shredded and obsolete grades generally remained flat, compared to July settlements although some cities managed to increase deal prices on obsolete scrap by $10/gt.


However, in the South prices for primes remained unchanged while shredded and cuts gained $10-20/gt over July. Sellers were holding out for upward prices on shredded and cuts on Wednesday, east of the Midwest amid strengthening exports off the East Coast, which led to regional price variance.


Exports driving East Coast prices

Markets close to the East Coast gained momentum Thursday afternoon with trades in some markets at $20-30/gt increases on shredded and cut grades. The Philadelphia market, long overdue for a price correction, traded at flat to up $20/gt on primes with shredded and cuts increasing by $20-30/gt. 


East Coast exports are at $290/mt cfr Turkey for bulk shredded which is still above domestic prices but leading to a more coordinated level. Based on trading Thursday, domestic prices for shredded are now at around $260/gt ($256/mt) delivered Philadelphia mill.


On Wednesday, trading price levels in Chicago were reportedly similar to Detroit at decreases of $20/gt on primes, however by Thursday, deals for shredded and cuts were trading at mostly sideways prices with some reports of $10/gt increases on cut grades delivered Chicago, compared to July prices.


Cincinnati-Indianapolis and Pittsburgh regions generally followed Detroit’s price trends at drops of $20-30/gt for primes, sideways for shredded, and no change to slightly up for some cut grades.


Cleveland was trading at unchanged prices on Thursday for shredded and cut grades, compared to July settlements as very low purchase activity was reported for prime grades in that region. Cleveland deals that have yet to settle are expected to pay up $10/gt for shredded and cut grades.


Further deals reported in the Midwest including Detroit were heard on Thursday at price increases of $10/gt on shredded and cuts in some cases, to fulfill remaining tonnage requirements.


Regional influences remain strong

The regional variance was influenced by export market, scrap availability, and mill buying programs, which were reduced for several Midwest or surrounding mills. Obsolete grades were reported as limited in stronger markets such as the East Coast. 


However, activity and volumes are still low in the Midwest market as US Steel in Gary resumed production on August 1. ArcelorMittal also recently restarted its idled blast furnace at Indiana Harbor while its Burns Harbor plant is recovering from the recent blast furnace explosion.


In the Southeast, #1 busheling generally traded at unchanged prices compared to July. HMS 1&2 (80:20), machine shop turnings and P&S 5ft traded at increases of $10/gt, shredded were up $10-15/gt, consistent with Alabama. Louisiana sold at increases of $10-15/gt on P&S 5ft and HMS 1&2 (80:20).


Oklahoma and central markets sold at sideways levels while the Carolinas went up by $20/gt on cuts and #1 busheling remained sideways. The Gulf and South are trending at up $10-15/gt.

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