RMDAS Pricing Reflects Drop in Market

A lack of export buying in tandem with slower melting schedules at domestic mills have combined to exert downward pricing pressure in the ferrous scrap market. (Click here to view the prices for August, 2008)

Processors and shippers began reporting in early August that domestic mills were cutting back on orders, with many steel mills taking maintenance shut-down time in August.

At least one recycler wonders aloud if the downtime across the steel industry is more than a coincidence. “I think they all jumped on the bandwagon to collectively run [scrap prices] into the ground,” he comments.

The skid in domestic demand was coupled with a slump in export demand as well, with many Turkish buyers having taken the summer off. Much of China’s metals industry also spent August in the snooze mode, especially in the northern part of the country so as not to contribute particulates into the air during the Olympics in Beijing.

The combination of factors led to domestic scrap prices losing as much as $62 in value in August compared to the month before. Figures compiled by Management Science Associates (MSA) for its Raw Material Data Aggregation Service (RMDAS) showed shredded scrap being purchased for an average of $55 per ton less on the spot market in August.

Those figures may not truly reflect the drop in the market, according to one recycler, who says that buyers in late July and early August were paying more per ton (bringing up the average), but transactions made in mid-August reflected even lower ferrous pricing.

The Prompt Industrial Composite grade tracked by RMDAS (now consisting of purchases of No. 1 bundles, No. 1 busheling and No. 1 factory bundles) lost less in average value in most regions, and those grades even fetched $10 per ton more in August in the South region. Nationally, mills paid an average of $21 per ton less for the prompt grades.

 The No. 1 HMS grade lost value at roughly the same rate as shredded scrap, with buyers paying an average of $53 per ton less nationally.

From the perspective of a scrap recycler in Ohio, the overall affect has been significant. “Everything has gone down like a ton of bricks,” he said in early August, saying mills and brokers were offering to buy some grades at from $100 to $150 less than 30 days earlier.

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In nonferrous wire and cable processing, SWEED balances proven performance with ongoing innovation. From standard systems to tailored solutions, we focus on efficient recovery and practical design. By continually refining our equipment and introducing new technology, we quietly shape the industry—one advancement at a time.

Sponsored Content

Redefining Wire Processing Standards

In nonferrous wire and cable processing, SWEED balances proven performance with ongoing innovation. From standard systems to tailored solutions, we focus on efficient recovery and practical design. By continually refining our equipment and introducing new technology, we quietly shape the industry—one advancement at a time.

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Redefining Wire Processing Standards

In nonferrous wire and cable processing, SWEED balances proven performance with ongoing innovation. From standard systems to tailored solutions, we focus on efficient recovery and practical design. By continually refining our equipment and introducing new technology, we quietly shape the industry—one advancement at a time.

The Raw Material Data Aggregation Service (RMDAS) Ferrous Scrap Price Index is based on data gathered from a statistically significant compilation of verified ferrous scrap purchase transactions.

RMDAS is a service of Management Science Associates Inc. (MSA), Pittsburgh. Those seeking more information about RMDAS can contact MSA’s Ralph Pinkert at 773-588-1199 or via e-mail at RPinkert@MSA.com.