Shredders raise scale prices; mills making quiet deals on all scrap grades

An abundance of quietly transacted higher-priced deals on ferrous scrap and a recovery in hot-rolled coil prices have been fueling expectations of a strong kick-off to the year in the January 2023 trade

Mills clearly did not cover their December needs in the monthly trade and are now pounding the pavement trying to secure enough material to ride through the rest of the year, sources told Fastmarkets.

One national scrap seller said that mills are paying up $30-50 per gross ton to get quick shipments of scrap in the Midwest and southern regions.

In the Ohio Valley, a scrap seller said everyone who is willing to sell early is getting sweetheart deals.

“The mills are basically paying what they think January will be to get scrap now,” the Ohio Valley source said.

A southwest recycler said a mill told him to name his price if he can ship fast.

“He [then] offered $25 per ton above the December price. Scrap is not coming in, and the weather and holidays do not help,” the southwest source added.

A shredder selling into the Chicago market said his suppliers, which include auto wreckers, are done for the year.

“This has been a tough month. No one [suppliers of infeed] wants to sell me anything. There is a recognition that the bottom of the hot-rolled coil market has come and gone, and there is more upward momentum for ferrous just weeks away,” that shredder said.

So while some sellers have been holding out, some large scrapyards are empty and running on less than a week of supply in the yard, and other yards are covered in snow.

A South Dakota recycler has inventory, but it is buried under a couple feet of snow and roads are impassable, the southwest recycler said.

“It can go up, down or sideways. It makes no difference now [because of the snow],” the southwest recycler said.

Hot-rolled coil prices are in recovery mode, and that trend is expected to continue in January because mills have good order books.

Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $35.69 per hundredweight ($713.80 per short ton) on Friday December 16, up 4.97% from $34 per cwt a week earlier.

Shredding operations continue to lift buying prices to attract flows in all regions.

Fastmarkets assessed the price for steel scrap shredder feed, fob Midwest at $133.82 per gross ton on Monday December 19, up 6.89% from $125.19 per ton the week prior.

Fastmarkets assessed price of steel scrap shredder feed, fob Ohio Valley $159.26 per gross ton, up 3.56% from $153.78 per gross ton on December 12.

Fastmarkets’ assessment for steel scrap shredder feed, fob Southeast was $132.87 per gross ton, up 1.55% from $130.84 per gross ton on December 12.

What’s next for the ferrous supply chain and scrap and steel prices? Join leading industry experts and make new connections in Dallas at Scrap & Steel North America on January 17-19.
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