This week has been a rough one for the ferrous and nickel markets as prices. The ferrous domestic market has continued to soften with most of the South East being affected by the hurricanes and the Mid West complaining of low demand and preparing for the winter. The drops in the article below are only relatable to the fall of prices we all saw in 2008-2009 in the Great Recession. On the West coast we haven’t seen the $50-$60 Gross/Ton drops, but we’re looking at material dropping anywhere from $10-$30 depending on the type of material.
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PITTSBURGH — The U.S. ferrous scrap market remained up in the air Oct. 7, with dealers sitting by the phones awaiting orders as buyers remained in the shadows.
Even the Detroit market, which initially appeared to be a shoe-in to record a decline of $50 per gross ton compared with last month, remained unsettled late Wednesday as some buyers tried to negotiate even steeper cuts for the cut grades of scrap.
“Mills' buyers are in a mode of ‘Why buy when I can get it cheaper tomorrow?’" one supplier into the Detroit market said.
“If the magic number was ‘down $10’ in September, it appears to be ‘down $50’ in October,” an Ohio Valley source added.
One Detroit producer entered the market late Wednesday and continued with the $50 downtrend on prime and shredded, but picked up his heavy melting scrap at a $55 discount, and plate and structural scrap at $57 below September levels. The spot buys of select grades represented a small buying opportunity for a mill that didn’t need much of the cut grades.
In Cleveland, one producer entered the market Oct. 7 at a discount of $50 per ton but is buying half of his usual raw material volumes. The reduced options in Cleveland have brokers and recyclers trying to springboard into any market that will buy their material.
“It’s absolutely doom and gloom,” according to one Ohio prime scrap dealer who tried to sell into a southern market but couldn't land the deal. “It’s not an atrial fibrillation, which is a survivable heart attack, but more of a ventricular fibrillation. Some people are not going to survive.”
Scrap dealers across the country are commiserating because they are being offered prices for their material that would force them to sell at a loss. Sellers are choosing to take the loss because they need cash flow.
A Pittsburgh producer and an Alabama mill joined the ranks seeking to procure material at across-the-board discounts of $50 per ton.
It appears no area will be spared from the minimum $50-per-ton reduction when the dust settles, aside from a few grades in Philadelphia. One mill in the city is purchasing its cut grades at down $40 to $45 per ton, although its shredded scrap was bought at $160 per ton—a $55 reduction from September. The city's second mill has yet to enter the market, and it is unclear whether it will be buying at all during the first week of the month.
In the Chicago, Texas, Carolinas and Alabama markets, deals are being reported down between $50 and $60 per ton, but not all mills have fully entered the market, so where it will ultimately land is unclear. However, larger buyers seem to be able to get their tons placed at a discount of closer to $50 per ton.
Meanwhile, a mill in Hamilton, Ontario, is reducing its purchases by about 50,000 tons due to scheduled maintenance of a blast furnace, a supplier in the region said. The same mill is also expected to idle an electric-arc furnace for maintenance next month, which will cause another round of reduced buying, the supplier added.
http://www.amm.com/Article/3495486/Home/Ferrous-scrap-on-edge-as-mart-awaits-hit.html
