Domestic steel mill scrap
purchase transactions recorded by MSA Inc.’s Raw Material Data Aggregation
Service (RMDAS) show the high-volume grades tracked by the service lost value
in nearly every region of the United States in late January and the first two
and a half weeks of February. The sole exception was shredded scrap holding its
ground with no gain or loss in the RMDAS North Central/East region.
Unfortunately for
shippers who prefer higher scrap prices, mid-February reports indicate export
demand levels seem unlikely to boost those prices the remainder of this month.
In the domestic steel industry, output is stable but is down year on year.
Mill transaction figures recorded by RMDAS from Jan. 20-
Feb. 19, 2024, show prompt grades falling by $19 per ton as a national average,
while No. 1 heavy melting steel (HMS) lost $11 in value and shredded scrap’s
value fell by $5 per ton.
In the RMDAS South
region, the prompt industrial composite grade lost more value, $27 per ton,
than in the North Midwest and North Central/East regions, where the grade lost
$7 and $16 per ton respectively.
While shredded scrap held
its value in the North Central/East region, it lost $2 per ton in the North
Midwest and dropped by $12 in ton in the South.
No. 1 HMS, a frequently
exported grade, suffered its biggest drop in the domestic mill-dependent North
Midwest RMDAS region, losing $17 per ton in value in late January and the first
two and a half weeks of February.
In the North Central/East
and South regions, with greater availability to export docks, No. 1 HMS dropped
by $10 per ton in the South and just $9 per ton in the North Central/East.
Stable domestic mill
demand offers one relatively positive piece of news, according to production
statistics compiled by the Washington-based American Iron and Steel Institute
(AISI).
According to AISI, in the
week ending Feb. 17, 2024, domestic raw steel production rose by 0.6 percent
compared with the previous week. However, output so far in 2024 lags behind
production levels in early 2023.
In the week ending Feb.
17, 2023, some 1.8 million tons of steel were made in the U.S., while in the
same week this year that figure of 1.72 million tons was down by 4.4 percent.
Year to date through Feb.
17, output of more than 11.65 million tons is down 1.8 percent from the more
than 11.87 million tons made in the first seven weeks of 2023. According to
AISI, mills so far this year are operating at a 76.5 percent capability
utilization or capacity rate compared with 78.1 percent rate in the same period
last year.
Pricing and news service Davis Index, meanwhile, is reporting in the
third full week of February that overseas buyers shopping at East Coast ports
have been able to purchase scrap for up to $5 per ton less compared with the
week before.
According to Davis Index,
the dockside price for #1 HMS recently has fallen by $5 per ton in Boston and
Philadelphia while the grade has lost $4 per ton in value in New York. On the
Gulf Coast, buyers have only managed a $1 per ton discount in the third week of
February, according to the pricing service.