US ferrous scrap prices jumped up as continued export demand and supply-side concerns combined to provide upward pressure as domestic mills bid against exporters for material.

 

The Platts reference price for shredded scrap rose $32.50/lt to a new midpoint of $190/lt delivered to Midwest mills as domestic market prices pulled closer to export tags. The range widened to $180/lt-$200/lt from $150/lt-165/lt, as some deals were completed and other players continued negotiating prices.

 

"We've been able to sell and we've been selling," said one Midwest scrap processor, who runs multiple locations and feeder yards. He reported shredded sales at $200/lt, delivered to local Midwest mills. Heavy melting scrap fetched $180/lt and cut plate and structural sold at $190/lt, both up about $40/lt from early April levels. He believes exporters are still trying to cover orders, providing upward pricing pressure, and he is considering holding back some tonnage to see if prices firmed further going forward.

 

Prime scrap, he said, was the most immediate concern, having rocketed up some $60/lt to $230/lt-240/lt in the wake of plant closings by General Motors and Chrysler, which are large generators of prime scrap. "Prime is its own animal right now," he said. "I think a lot of guys are hurting with GM and Chrysler down." Mills have enough prime busheling and bundles to melt for May he said, but are worried about supplies for June and July.

 

An East Coast scrap processor selling both domestically and exporting also reported higher prices, saying he had heard of shredded sales to Atlantic Coast mills at $190/lt and $200/lt. "The domestic markets will have to move up $40-$50 if they want to buy anything," he said. Turkish buyers still need to buy and are paying upwards of $260/mt for shredded material, he added, saying: "The Turks are trying to stay away but still need scrap." He also reported dockside buying prices as high as $205 for HMS and $215 for plate/structural. Prime scrap was heard at $230/lt, in line with the Midwest processors' figures.

 

"The domestic mills know they're going to have to pay more," agreed one Southeast scrap supplier active in heavy melting and plate and structural grades. "I've decided that I'm not going to sell below $200/lt. If the domestics don't want to pay, I won't sell to them," he said. He reported domestic sales at $202/lt for HMS No. 1 and 2 and $215/lt for plate/structural, both delivered to local mills. Export dock sales were higher at $212/mt for an 80/20 blend of HMS No. 1 and 2 and $225/mt for plate/structural.

 

Like the Midwest processor, he is holding back material in anticipation of a stronger market going forward. "I'm holding out tons for a mid-month buy. I think the numbers will be stronger," he commented. –Platts