Transactions between US steel mills and ferrous scrap dealers remained in line Wednesday -- the tail end of the May buying period -- with price levels seen earlier in the period.
Shredded scrap sales remaining $15/lt below April procurement levels in most Midwest markets and other grades were trading sideways to $10/lt lower.
Pricing in the Ohio Valley was the last to finalize. Deals done in the region indicated prices there would fall the most compared with the previous month, after it had seen the highest regional prices paid in April.
"This is a strange one," one Ohio Valley dealer said of the May buying period. "I think the mills know the market is dropping and see no need to put a price on it. I think dealers patiently wait and make sure your tons are cleared because if they're not, the price will be less next month."
The entry of mills to the market late, hoping to secure scrap at lower prices, led to transactions dragging out through the seventh day of the month, according to sources.
Shredded material traded this week around $385/lt in Detroit and Indiana, with slightly softer pricing in Chicago in the range of $380-385/lt. The Chicago area was affected by multiple mills having limited or no buying programs in May. Shredded scrap traded around $395/lt in the southeastern US and early numbers in Ohio indicated shredded prices in the range of $395-400/lt.
Shredded scrap prices saw the greatest slides among major grades in May due to an oversupplied market caused partly by two major exporters selling shredded material to domestic mills and late-arriving April shred shipments. One source described mills dealing with previously purchased shred arriving all at once as a "snake trying to swallow a mouse."
Based on Wednesday's buying activity, the Platts daily assessment for shredded held at $380-390/lt delivered Midwest mill.
No. 1 busheling was transacted as high as $430/lt in Ohio and as low as $390/lt in Chicago. Mills paid $400-405/lt for No. 1 busheling in Detroit and Indiana and $405-413/lt in the southeastern US. No. 1 busheling was described by most sources as the most in-demand grade during the month.
On the West Coast, pricing was sideways across the board, sources said. Mexican mills seeking West Coast material at prices that were unchanged helped prevent any pricing erosion in the area.
"It seems there's a good balance between supply and demand," one West Coast dealer said.
