US ferrous scrap pricing trended lower on Thursday, the fourth day of the traditional US buy week as strong Ohio Valley pricing did not have a ripple effect into other markets.
Mills outside the Ohio Valley region were able to remain on the sidelines early in the week and enter the market late and buy most grades of scrap at sideways up $15/lt compared to March settlements.
Dealers were able to sell earlier in the week to Ohio Valley mills at prices $20-25/lt higher on tight inventory concerns and aggressive buying programs.
Mills and dealers were still trading late on Thursday with the Detroit market up $10 compared to March and a slow-developing Chicago market also moving up $10 on most grades. Market pricing was tapered by the domestic sales by East Coast exporters and steel mill production disruptions at two US Steel facilities, its Gary Works in Indiana and its Great Lakes works in Ecorse, Michigan. Sources indicate that early sales by East Coast exporters to domestic mills, capped pricing at up $25/lt in the Ohio Valley and the US Steel disruptions capped the Detroit market at up $10.
The Platts daily assessment for shredded scrap moved down $7.50/lt on Thursday to $395-405/lt delivered Midwest mill to reflect pricing being paid late Thursday by a majority of Midwest mills. The assessment midpoint is up $12.50/lt compared to the first week of March.
"It just seems like the mills played their cards right this month," one East Coast scrap dealer said. "Ohio went up early and got everyone excited and then dealers started to unload material and the mills said: nevermind, we don't have to pay that much. Let's wait another day and buy up $10 and maybe sideways, maybe we will wait until next week."
Ohio Valley mills that had been in the market last week and early this week saw shredded scrap prices trend from $425 for the earliest sales to $415 for latest sales.
"A lot of demand in our district," one Ohio Valley supplier said. "Inventories were probably the driving force in the up pricing and demand is probably as good as it has been since the beginning of the year."
Trading was expected to continue today with a majority of tonnage west of the Detroit market expected to be concluded by day's end.
