RMDAS Reports Findings
Over the period covering April 20th to May 19th, ferrous scrap buyers in the U.S. witnessed a notable reduction in price, with a decrease of approximately $32 per ton on average compared to the prior month.
Statistics used in the report are based on scrap acquisitions of steel producers all over America, as collected and monitored by MSA Inc.’s Raw Material Data Aggregation Service (RMDAS), located in Pittsburgh.
Data from RMDAS for late April until early May revealed a substantial decrease in the value of scrap metal. Prompt scrap showed an average decrease of $25 per ton and was most prominent with No. 2 shreds and No.1 heavy melting steel (HMS), which fell by $36 on average nationally.
Those buying and selling scrap metal have also noticed a significant decrease in the RMDAS No. 1 busheling grade, as it fell from $650 per ton in June 2022 to its lowest point of $357 in November of last year.
A Documented Upturn
Since then, the grade has been on an upturn and saw a high point of $561 per ton in April, although it eventually dropped by $25 to stand at $536 over the last thirty days.
This year and last have seen distinct curves for obsolete shredded and HMS grades, with No.1 busheling particularly increasing in value during market peaks.
Last June, the cost of No.1 busheling skyrocketed to an average of $255 a ton when compared with No.1 HMS. Additionally, the prompt grade was even more valuable, commanding a premium of $169 a ton above shred prices for that month.
As of October of last year, an unprecedented phenomenon occurred – shred became more expensive than No. 1 busheling. There was a $2-per-ton difference in the price between the two commodities, with the market anomaly lasting through December. As expected, however, eventually No. 1 busheling regained its position as the most highly valued material.
RMDAS reports that in late April and throughout the opening three weeks of May, there was an increase of $74 per ton for No. 1 busheling compared to shred, which is a popular type of spread used across America.
Market Effects on Scrap Sales
The current marketplace has witnessed an interesting disparity regarding the prices of shred and HMS. According to RMDAS, scrap dealers are being offered an average $462 per ton for shred while only obtaining $362 per ton for HMS within the past month.
The cause of the difference in prices is often attributed to deficiencies in export markets, where HMS grades are mostly favored by bulk shippers outside of the United States.
Though there have been subtle variations from week to week, the overall demand for steel on a domestic level has been consistent during 2023. Up until mid-May of this year, United States mills had produced 4 percent fewer tons of steel than was seen during that same time frame the prior year.
Several global elements have been affecting international purchasing, including the earthquakes in Turkey, difficulty exchanging U.S. dollars to Pakistani rupees, and the likely saturation of China’s construction sector, causing ramifications for steel suppliers from Taiwan, South Korea, and Malaysia.
