Steel mills throughout the US Midwest continued to buy shredded scrap on Tuesday at levels $10/lt below May pricing as negotiations on other grades dragged on with a slight disconnect between mills and suppliers.
Mills in Chicago, Detroit, Indiana and throughout the Southeast followed the lead of a Detroit-area mill that entered the market late Monday at down $10/lt on shredded.
In addition to the $10 drop on shred, Chicago mills were also able to lower prime and cut grades by $5/lt while an Indiana mill's bid to buy cuts and primes at down $10 was meeting resistance.
An Ohio Valley mill late Tuesday entered the market at down $15/lt on shredded scrap ($295/lt delivered mill), down $10/lt on plate & structural ($300/lt) and down $10/lt on heavy melting scrap ($280/lt). The $15 fall on shred had been expected as the region had the highest shredded scrap price in the country in May and nearby mills had significantly reduced buying programs in June.
"They are just equating to other regions, everything is leveling out," one supplier said.
S&P Global Platts maintained its daily shredded scrap assessment on Tuesday at $290-$300/lt delivered mill. The assessment is down $10/lt from May.
Northern Ohio suppliers expected shredded and cut grades to fall $10/lt but negotiations were not expected to finalize until Wednesday. The resilience of prime scrap has been somewhat of a surprise during the June buy week.
"Integrated mills are clamoring for bundles," one supplier said. "They are willing to pay $80 more for a No. 1 dealer bundle over shred. It is conceivable that primes, even though they are running at a significant premium, may remain sideways."
An Iowa mill was attempting to buy all grades at down $10/lt across the board late Tuesday. It was not yet clear how much support the mill was receiving at those levels from suppliers. One trader said suppliers were selling shredded scrap to the mill at down $10 but not willing to move cut grades of scrap at down $10 to the mill.
Some dealers were concerned about more material coming to the market as some mills in Detroit finished their buying programs and withdrew from the market and more mill outages were being reported around the Midwest.
Late Tuesday, a Northeastern US mill came out with sideways offers on all grades except shredded, which it bid down $10/lt to $275/lt delivered mill.
The Southeast market was starting to trade on Tuesday with shredded scrap moving down $10 throughout the region while pricing talks on other grades were more contentious.
"There are a few mills pushing for primes down $10/lt while some with a greater appetite [for prime scrap] are buying at sideways," one local supplier said. "Trading is still a long way from being done as several mills haven't entered the market yet."
Another local Southeastern supplier said he was getting close to agreeing on pricing with mills in the region but believed talks "may drag into tomorrow."
