RMDAS numbers portray ferrous market drop

Mill buyers in the United States paid on average about $32 per ton less for ferrous scrap from April 20 to May 19 compared with the previous 30-day time frame.

Those figures are based on scrap purchases made by steel mills in the U.S. as recorded and tracked by the Raw Material Data Aggregation Service (RMDAS) of Pittsburgh-based MSA Inc.

The RMDAS figures for late April and the first three weeks in May show prompt scrap losing $25 per ton in value on average nationally, while the leading obsolete grades tracked (No. 2 shred and No. 1 heavy melting steel, or HMS) fell by $36 per ton.

Sellers and buyers of prompt scrap have watched the RMDAS No. 1 busheling grade plunge from $650 per ton in June 2022 to a temporary trough of $357 per ton in November of last year.

Subsequently, the grade has been on a rebounding trajectory, hitting a temporary peak of $561 per ton this April before receding by $25 per ton (to $536) in the most recent 30-day period.

The obsolete shredded and HMS grades have largely followed the same down-up-down curve, although No. 1 busheling has opened up a spread and gained more value during market peaks this year and last.

In June of last year, mills in the U.S. paid a whopping $255 per ton premium, on average, for No. 1 busheling compared with No. 1 HMS. The prompt grade also was worth $169 more per ton compared with shred that month.

By October of last year, the spread between No. 1 busheling and shred had disappeared entirely, with mills actually paying $2 more per ton for shred on average. That market anomaly carried on into November and December before No. 1 busheling regained its customary top value position.

Mills in late April and the first three weeks of May, according to RMDAS, paid $74 more per ton for No. 1 busheling compared with shred—a type of spread that has become common in the U.S. market.

A noteworthy spread in the market right now involves the difference in value between shred and HMS. In the past 30 days, mills have paid $462 per ton on average for shred but just $362 per ton for HMS, according to RMDAS.

Such a discrepancy often can be blamed on weaknesses in export markets, with overseas bulk shipment buyers most commonly seeking HMS grades.

In the domestic market, mill demand has been steady if not spectacular in 2023. Although mills in the U.S. had produced 4.0 percent less steel through mid-May 2023 compared with the same timeframe last year, week-to-week fluctuations have been minimal.

Overseas buying, meanwhile, has been subject to a range of factors including disruptive earthquakes in Turkey, U.S. dollar cash flow problems in Pakistan and a potentially played out construction market in China, which likely is having spillover effects for producers of steel in Taiwan, South Korea and Malaysia.