Canadian ferrous prime grades made significant gains at the end of March trade on Friday.
In Toronto, #1 bundles and busheling increased by C$14/nt ($10.43/nt) and C$15/nt, respectively, while the same prime grades rose by C$10/nt and C$2/nt, respectively, in Montreal.
The monthly Davis Index for #1 bundles rose to C$353/nt and to C$351/nt for busheling in Toronto and declined by C$2/nt to C$265/nt for HMS 1&2 (80:20). The index for turnings rose by C$5/nt to C$210/nt, decreased for P&S 5ft by C$3/nt to C$290/nt, and increased for shredded by C$4/nt to C$328/nt.
In Montreal, #1 busheling increased by C$10/nt to bring the monthly Davis Index to C$310/nt.
Cut grades in Montreal also gained in March. The index for HMS 1&2 (80:20) rose by C$2/nt to C$230/nt and increased for turnings by C$4/nt to C$184/nt. The Davis Index for P&S 5ft increased by C$3/nt to C$253/nt, while the shredder feed rose by C$6/nt to C$196/nt.
Market participants in Toronto said scrap flows were poor due to a proliferation of shredders cleaving the share of scrap into smaller portions. Additionally, though the price of prime scrap has increased because of the price of new steel, supply for both remains tight.
However, some market participants are seeing additional supply due to the container shortage that’s keeping more scrap inland and resulted in price increases this month that are below levels most traders in Toronto expected.
Furthermore, the US dollar has made significant gains making US buyers more competitive in the Canadian market. Still, one Toronto-based mill told Davis Index that the weaker Canadian dollar has allowed it to become more competitive on a manufacturing cost basis, although that will not necessarily translate into elevated shipping volumes into the US.
Covid-19 has not substantially affected Canada’s ferrous scrap market, but some market participants believe that could change in the coming months.
($1 = C$1.34)