Ferrous

Buyers of ferrous scrap in most parts of the country paid roughly the same in June for all grades of scrap as they did in May. Average per-ton pricing rose between $1 to $7 per ton for most grades in most regions, with only No. 2 shredded scrap showing a slight decline in the South.

Figures compiled by the Raw Material Data Aggregation Service (RMDAS), operated by Management Science Associates’ (MSA), Pittsburgh, show mill buyers in the North Midwest region paid an average of $7-per-ton more for prompt industrial composite grades, such as No. 1 busheling and bundles, in June.

While the price of the No. 2 shredded scrap grade actually fell in the RMDAS South region, declining $2 per ton, in other regions the grade rose $2 to $5 per ton.

The prompt industrial composite grade benefited the most from the price stabilization in June, with the price rising across all regions and rising nationally by an average of $6 per ton.

Regionally, mills in the North Midwest region, on average, paid the most per ton for all three grades of ferrous scrap. Per-ton averages paid by mills there in June ranged from $251 per ton for No. 1 HMS and $295 per ton for prompt industrial composite purchases.

The slight price gain will probably not be enough to lure scrap away from generators who are waiting for a larger price rebound before bringing their scrap across the scale.

A shredder operator in the South refers to "auto parts abritragers," or auto dismantlers who have observed a pattern of ferrous scrap prices that fall in late spring and head back up during the summer each of the past two years.

In the South, a proliferation of auto shredders is also being pointed to as an explanation for lower inbound scrap volume at shredder yards. "There is just a tremendous amount of competition here in the South," says the Southern shredder operator. "Margins are dramatically depressed. It wasn’t this way a few years ago."

Material is not necessarily flowing any stronger in the North. An Ohio shredder operator remarks that he is having difficulty building up more than three or four days worth of material to inventory for his shredder at any one time.

Reported regional aggregated spot market prices per gross ton shown for each commodity are based on all Management Science Associates’ (MSA) Raw Material Data Aggregation Service (RMDAS) participants’ actual order data submitted to and processed by MSA as of the 20^th of each respective "buy month," rounded to the whole integer. A map of RMDAS regions is available at http://rmdas.msa.com, as is a further explanation of RMDAS methodology and an accompanying disclaimer.

No. 2 shredded scrap is defined as containing .17 percent or greater copper content. The prompt industrial composite consists of an average of No. 1 bundles and No. 1 busheling.

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