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A noteworthy lack of volatility continued into the August buying season, as the prices North American steel mills paid for ferrous scrap have remained stable throughout the summer. August spot prices stayed within a few dollars of July's figures.

According to the Raw Material Data Aggregation Service (RMDAS) of Management Science Associates (MSA), Pittsburgh, spot buyers in early and mid-August paid within $10 per ton of what they paid in July for all grades across all regions of the United States.

National price averages for three of the largest grades of ferrous scrap tracked by RMDAS either decreased by a few dollars in August or, in the case of No. 1 heavy melting steel (HMS), remained flat.

Mill buyers were able to pay, on average, $8 less per ton for the prompt industrial composite grade (consisting of No. 1 busheling, No. 1 bundles and No. 1 factory bundles) in August. Prices for the grade remain slightly greater than $500 per ton at $504.

Spot buyers of No. 2 shredded scrap paid an average of $447 per ton in August (down $4), with the grade trading at a slightly lower price of $440 per ton in the North Midwest region (Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, Wisconsin, the Dakotas and northwest Indiana).

Regional pricing variations remain minimal. Spot buyers in the North Midwest were able to pay $11 or $12 less per ton for No. 1 HMS compared with buyers in the other two RMDAS regions, and buyers in the South paid $6 to $8 more per ton on average for prompt grades.

A scrap recycler in the Great Lakes region reports that material flows have been steady throughout the summer, as peddlers and small generators remain active, thanks in part to the high prices being paid for red metal scrap.

The automotive industry is generating prompt scrap in both the traditional Midwest locations as well as in the South. The scrap industry around Chattanooga, Tenn., is benefiting from the ramping up of Volkswagen's automotive assembly operations there.

Volkswagen now employs 2,000 people in the city, according to a late July report in The Chattanoogan newspaper. Production of the Volkswagen Passat at the plant began in May of 2011, and economic development officials in the area are touting additional jobs and industrial activity that will be created by component suppliers to the plant.

The construction unemployment rate remains lofty, according to the Arlington, Va.-based Associated General Contractors of America (AGC), though it may have stabilized.

"When it comes to construction employment, for every state adding jobs, there is another one shedding just as many or more," says AGC CEO Stephen E. Sandherr.

Among the states exhibiting gains in construction employment (and, presumably, activity) between July 2010 and July 2011 were: Texas (23,800 jobs, or 4.2 percent growth); Illinois (15,400 jobs, or 8.2 percent growth); California (13,100 jobs, or 2.4 percent growth) and Michigan (9,600 jobs, or 8 percent growth). By percentage, other states in the country with rebounding construction sectors include North Dakota (4,000 jobs, or 19 percent growth) and Oklahoma (4,000 jobs, or 6 percent growth).

Figures for domestic steelmaking collected by the American Iron and Steel Institute (AISI), Washington, D.C., show the industry's output has remained stable throughout the summer.

In the week ending Aug. 13, 2011, domestic raw steel production was 1.88 million tons, with a mill capacity rate of 77 percent. That figure is up 230,000 tons from the 1.65 million tons produced in the comparable week of 2010—an increase of 14.3 percent.

The mid-August steel output figure is up 0.2 percent from the previous week, indicating a pattern of steady output for the steel industry in North America.

Steelmakers in other parts of the world also are largely producing at a stable rate in the summer of 2011. The 64 nations that report to the Brussels-based World Steel Association (WorldSteel) produced 127.5 million metric tons of steel in July. That figure is down slightly from the 127.7 million metric tons steelmakers produced in June.

China was a factor in that month-to-month decline in production, as steelmakers in that country produced 600,000 fewer metric tons in July compared with the amount they produced in June. Steelmakers in the European Union also slowed down slightly in July, with production there off by about 120,000 metric tons, according to WorldSteel.

(Additional information on ferrous scrap, including breaking news and consuming industry reports, can be found at www.RecyclingToday.com.)