Ferrous Scrap Prices on the Upswing

Ferrous scrap prices have risen at a greater rate than expected by sources quoted in Steel Market Update last month.

Scrap guru Mike Marley of World Steel Exchange Marketing reports that recent price increases have varied by region to region, and even within a few regions. In the North, shredded and cut grades are up about $20 per ton, he said.

In the South, meanwhile, some mills had to play catch-up and paid bigger increases. Shredded scrap prices rose by $30 per gross ton, cut grades like heavy melt and five-foot plate and structural were up by $25-30 per ton, and prime industrial grades like busheling rose by $10 to $12 per ton. So, in the South, prices on a delivered-to-the-mill basis from nearby suppliers are as follows: busheling $395-405, shredded $365-375, and five-foot P&S $360-365 per ton, Marley said.

Several factors have reshaped the market this month, he continued. Winter weather has interrupted supply into dealers’ yards and the processing and shipments of scrap to the mills. Trucking and rail are both challenged to meet the high demand, and high water on the nation’s rivers is disrupting barge traffic. Domestic mills are competing against foreign buyers as export demand for scrap remains strong. Some of the EAF mills that also own scrap yards have changed their sales practices and are no longer offering much scrap to other mills.

A scrap dealer in the Northeast reports that the March ferrous markets ended trading with relative calm considering the news on President Trump’s tariffs.  Obsolete prices were up $20-30 per gross ton (on the higher end in the South) and prime prices traded sideways to up $10 per ton, he said. “Export pricing continues to march higher, and the expectation is that there is room for prices to rise a little further into the $380 per metric ton CIF range for 80/20 with the healthy scrap to rebar spreads continuing as we get into the summer construction season.”

Looking forward, he added, most players expect domestic scrap prices to rise further into April. How much further depends on the weather and flows. “With new, higher price levels for obsolete scrap, we should see flows pick up. Interestingly, prime and shred are trading at very close to parity right now, which is rare. Both prices are give or take around $380 per gross ton delivered to the mills (a little lower in the Midwest and higher in the South).” He does not expect the market to return to a more typical $30/GT spread between the two grades until later in the summer.

Added another dealer, most mills in the northern regions have bought obsolete grades up $20 and primes sideways. However, this is only part of the story as the market is still trading and prices are fluid. Since Monday, mills have upped the ante on shred, pushing prices in Ohio to $385/GT and Indiana to $390/GT, a $30 increase. “The large national broker/mills are actively buying everything unsold. Unquestionably, the momentum into April is bullish,” he said.