NEW YORK — An oversupply of industrial steel scrap combined with falling demand sent prices tumbling in March for No. 1 busheling shipped to steel mills across most of the Midwest.
In a scenario that carried over from last month, strong scrap inventories, lower production runs, weak finished product demand and excess supply of prime scrap were among the chief reasons cited by mill buyers and suppliers for falling prime scrap prices.
Steel mills securing scrap from the Detroit region were the first to enter the market this month, with bids for No. 1 busheling down roughly $20 per gross ton from February.
The move prompted buyers in states like Indiana to follow suit. And with two of the largest No. 1 busheling-consuming states down $20 per ton, some better pricing out of mills in Illinois did little to prevent overall Midwest prices for the product from losing a lot of ground
The widely expected decline failed to trigger opportunistic purchasing, as some mill buyers were absent from the market this month.
"I don’t know that prices will be any different next week or next month. With production issues at one of our plants and higher scrap inventories, we didn’t need to buy any scrap this month," one buyer said.
Secondary scrap grades performed better as severe winter conditions and price drops in February hit scrap flows into dealer yards, market participants said.
Meanwhile, No. 1 heavy melt and shredded scrap prices were largely unchanged from February in most Midwest regions, except Chicago, where the lone spot market buyer was reportedly able to secure scrap at lower levels.
Market participants said shredded scrap prices—which typically trade about $15 to $30 per ton below the better yields of No. 1 busheling scrap—are now trending above prime scrap prices due to an oversupply of industrial scrap in a tightly supplied shredder feed environment."
Article by: http://www.amm.com/
