A Midwest steel mill entered the market Wednesday morning and made sideways pricing offers to ferrous scrap dealers to meet its reduced December melting requirements while mills seeking larger scrap programs were expected to have to pay higher prices.
"Guys that need scrap are going to have to jump up and pay for it," one dealer said. "Other mills are still debating if they can get away with sideways. If you want to buy scrap, you will pay up. If you are not chasing anything, you might be able to get sideways."
With most mills and dealers remaining on the sidelines as of late Wednesday, Platts maintained its daily shredded scrap assessment at $160-$175/lt delivered Midwest mill.
Market participants expressed concerns about the availability of scrap as the buy week was slow to develop.
"Scrap is tight and mills are starting to get concerned about availability," another dealer said. "There are many asking for tons that I cannot supply."
There was anticipated pricing strength in the Texas market where scrap availability was scarce on strong export demand.
"I think ultimately its sideways," a Southeast mill buyer said. "I believe dealers think with Texas possibly being stronger -- it may have some strength in some spotty areas. I believe it may be a stalemate until they concede sideways."
Pricing expectations remained mill and region specific. One Southeast dealer who remained on the sidelines as of late Wednesday said that "some dealers are holding back at sideways and will consider moving tons at higher numbers. I think we still have a lot more to play out for the December trade."
Supply concerns were limited to obsolete grades of scrap. One mill had contemplated a down $10/lt offer on No. 1 busheling before ultimately settling on sideways offers.
"I think mills that need material as far as shred and cuts will have to pay more than last month," another dealer said. "Primes seem level."
