Recent data from MSA Inc.’s Raw Material Data Aggregation Service (RMDAS) indicates a decrease in the value of high-volume ferrous scrap grades in various regions of the United States throughout late January and the initial weeks of February. An exception to this trend was observed in the RMDAS North Central/East region, where shredded scrap prices remained stable, showing neither gains nor losses.
Mid-February reports suggest that export demand is not expected to elevate scrap prices for the remaining days of the month. Despite stable production levels, the domestic steel industry has experienced a slight decline in output compared to the previous year.
RMDAS recorded transaction figures from January 20 to February 19, 2024, reveal a decrease in the national average price for prompt scrap grades by $19 per ton. Additionally, No. 1 heavy melting steel (HMS) saw an $11 reduction in value, and shredded scrap prices dropped by $5 per ton.
The South region reported a more significant decrease in the prompt industrial composite grade, with a loss of $27 per ton, compared to the North Midwest and North Central/East regions, where prices fell by $7 and $16 per ton, respectively.
While shredded scrap prices were stable in the North Central/East region, the North Midwest saw a $2 per ton decrease, and the South experienced a $12 per ton drop. No. 1 HMS, often exported, faced its most considerable value decrease in the North Midwest, with a $17 per ton loss.
In regions with better access to export docks, such as the North Central/East and South, No. 1 HMS prices fell by $9 and $10 per ton, respectively.
On a positive note, the American Iron and Steel Institute (AISI) reported a slight increase in domestic raw steel production by 0.6 percent in the week ending February 17, 2024, compared to the preceding week. However, the total output for the year remains lower than the figures recorded in early 2023.
Comparison of steel production volumes shows a 4.4 percent decrease from 1.8 million tons in the week ending February 17, 2023, to 1.72 million tons in the corresponding week in 2024. Year-to-date production through February 17 also fell by 1.8 percent from the previous year.
The AISI highlighted a slight reduction in mills’ operating capacity, from 78.1 percent in the early weeks of 2023 to 76.5 percent in the same period in 2024.
Furthermore, the Davis Index reported that overseas buyers were able to secure ferrous scrap from East Coast ports at up to $5 per ton less in the third week of February compared to the previous week. The dockside price for #1 HMS saw reductions in several major cities, with the most significant price drops reported in Boston and Philadelphia. Gulf Coast buyers achieved a smaller discount of $1 per ton during the same period.
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