Scrap Prices Decline $75-100/Ton in May

Steel Market Update sources report ferrous scrap prices fell $75-100 per gross ton in May, following record high prices in March and April due to the war in Ukraine. Heavy melt (HMS) was down nearly $100 per gross ton, whereas shredded and busheling prices were down $75 per gross ton.

“Demand is okay, but there’s just too much supply floating around, and consumers have plenty of inventory. We expect prices will come down further next month,” said one source.

SMU pegs busheling prices at $700 per gross ton in May, shred at $525 per gross ton, and HMS at $445 per gross ton. As with our steel prices, we publish a range for each scrap product – each is currently at plus or minus $25 per ton from these prices.

Recall that from February to March, scrap prices saw the largest monthly increase in our history, with shredded scrap trading in March at around $600 per gross ton and prime scrap at $700 per gross ton – up by $125-175 per gross ton over February. In April, prime scrap rose another $75 per gross ton to $775 per gross ton, while obsoletes were flat to down. Prior to the Ukraine-Russia war, prices had declined in January and February.

Obsolete grades, such as HMS, are more elastic to price, which means more flows into yards when prices are high. That is not as much the case for prime scrap, which correlates more with manufacturing processes such as automotive stamping.

You can chart out scrap prices as far back as January 2007 with SMU’s interactive pricing tool.

By Brett Linton, Brett@SteelMarketUpdate.com