One Southeast mill was said to have traction purchasing machine shop turnings, No1 heavy melt and shredded at a $50-per-ton discount from May on Friday June 3, sources said.
In Detroit, three producers followed the lead on Monday June 6, purchasing prime (No1 busheling), shredded and cut scrap at a $50-per-ton discount.
Some prime sellers indicated they were happy to participate at down $50 per ton because there had been talk that No1 busheling could fall farther than shredded. Others were disappointed, however, because they were holding out hope that shredded scrap would move down by just $30 per ton due to that grade remaining in demand.
In Chicago, one seller said he expects to follow Detroit’s cues.
“We are hearing the same for our area. It is better than the down $70 per ton [that was floating around], but was hoping for just down $40 per ton. After this drop, we believe that this could be the bottom,” that seller said.
The mills may have had traction with sellers because the Midwest is plagued with reduced or no buys at producers in Detroit, Chicago and St Louis.
While there is solid demand in the South, Philadelphia and Pittsburgh are not especially hungry for scrap, and there are more than 10 cargoes on the East Coast that still need to find buyers.
Shredders have continued to lower their scale prices to get ahead of the falling market.
“It won’t be bad once we get to the bottom and get our margins back, but it is never fun on the way down,” a seller into the Pittsburgh market said.
Fastmarkets’ assessment for steel scrap shredder feed, fob Ohio Valley decreased by 4.74% to $192.63 per gross ton on June 6 from $201.22 per ton the week prior.
Fastmarkets’ assessment for steel scrap shredder feed, fob Midwest fell by 5.49% to $188.89 per gross on the same date, down from $199.87 per ton in the same comparison. And Fastmarkets’ assessment for steel scrap shredder feed, fob Southeast fell by 5.32% week on week to $162.91 per gross ton from $172.07 per ton previously.