ISTANBUL A late bounce in
ferrous scrap prices in some pockets of the Midwest prevented
key markets like Chicago and St. Louis from settling Feb. 6 as
previously anticipated, even as trading in other markets like
Detroit and parts of the Ohio Valley came to a close.
Early buying by mills in the
Detroit region with little incentive to chase scrap pushed
final prices down $20 per gross on all grades, except turnings,
compared with January levels.
But outside of Detroit, February
negotiations in the Midwest were still very much ongoing late
in the day Feb. 6.
In Chicago, some mills had
traded at prices that were down $10 per ton during the early
hours of buying, but a subsequent push back from dealers
brought some renewed strength, with later trades reportedly
down just $5, market sources said.
Sources said they largely
expected the Chicago market to settle late Feb. 6 or by the
afternoon of Feb. 7 as mills look to fix prices for their
remaining February requirements.
"Things appear to be firming up,
though, as supply seems a little tighter than anticipated and
demand is a little stronger than expected with a short shipping
month," a buyer for one Chicago-area producer said.
One supplier in Chicago said he
was content with a market that was down $10 on such grades as
shredded as prior speculation had pegged the drop at $10 to
"In such a scenario, when you
finish at $10 or under you feel pretty good. We havent
had much of a winter. Combine that with a weak export market
and mill demand, and this months drop isnt that
bad," he said. "Of course, weve had a cold snap now that
has sent scrap flows spiraling down, so were not going to
have a normal February in terms of scrap collection."
The trend was similar in St.
Louis. Two consumers secured some early volumes at down $15 per
ton for cut grades and down $12 to $13 for prime grades,
sources said, but mills that stepped in later were reportedly
trading at prices that were down $10 to sideways on some grades
as the market appeared to strengthen.
But in Northwest Indiana, the
market was a bit weaker, with early trades said down $15 per
ton or slightly more, depending on the grade.
Moving east, after some mills in
Cleveland entered the market Feb. 5 at down $20 per ton, the
remaining mills and scrap sellers fell in line on Feb. 6 and
the city settled down $20 across the board. One Cleveland-area
mill was trying to pick up scrap at down $25, but no sellers
were motivated to accept the offer, sources said.
Youngstown, Ohio, followed suit
and settled for February at a $20-per-ton discount to January
"Things have been slow to settle
because there is so much confusion, and people are treading
cautiously," a broker selling into Ohio said.
Some of the Ohio Valley weakness
might be due to an excess of material from Canadian suppliers,
the Ohio broker said. "Mills in Canada are not doing overly
well right now, so they are not consuming the scrap generated
in their own area. Canada has scrap surplus and they are
pushing the scrap down here."
Meanwhile, mills in the
Cincinnati area picked up their scrap needs at down $15, while
Pittsburghwhich hadnt settledremained a
moving target. There is an expectation that prime grades of
scrap might mirror Cincinnati and retreat $15 per ton, while
shredded scrap might fall $20 after all the buying is
completed, sources said.
In the Southeast, prices were
also looking to be down $15 per ton, sources said. Many
suppliers were still waiting for mills to enter the market,
while other sellers held off in hopes of sideways transactions,
sources told AMM.
Lisa Gordon, Pittsburgh,
contributed to this story.