In February 2022, Steel mill purchases of ferrous scrap in the United States were reported by the Raw Material Data Aggregation System (RMDAS) of Pittsburgh-based MSA Inc.
FREMONT, CA: Steel mill purchases of ferrous scrap in the United States were reported by the Raw Material Data Aggregation System (RMDAS) of Pittsburgh-based MSA Inc. in February 2022, indicating that scrap has traded in an unusually tight range this month. The price differential between prompt scrap grades and obsolete grades (shredded and top-heavy melting steel [HMS]) decreased after fast scrap lost 30 dollars in value. Similarly, ancient grades maintained their January prices. Looking at the price curves of all three RMDAS classes, it's evident that the significant value difference that had been present for all of the previous three years began to close in October 2021 and has been progressively narrowing since then.
Although there is still a 101 dollars differential between the value of quick scrap and top HMS, the national average paid for prompt scrap is now just 47 dollars per tonne higher than what is paid for shredded scrap. The service's prompt industrial composite grade averaged 522 dollars or 523 dollars per tonne in all three RMDAS zones (North Central/East, North Midwest, and South). By 2021, mills in the north paid 15 dollars to 19 dollars more per tonne for quick scrap than mills in the south. Some regional disparities in outdated grade pricing persisted into February, with North Midwest mills obtaining No. 1 HMS for 22 dollars per tonne less than their North Central/East counterparts. Mills in all three regions received 471 dollars to 482 dollars for their shredded scrap.
On the demand side, export demand likely boosted pricing in the North/Central East region. In early and mid-February, Davis Index reported greater offers from buyers in Bangladesh, India, and Pakistan, while prices began to flatten out in the third week of February. Despite pricing drops in early 2022, the market as a whole is providing sellers and buyers with manageable margins. Steel producers in the United States have been reporting profitable results for the year 2021, with the majority also expressing optimism for the year 2022. Broader economic indicators, on the other hand, maybe raise concerns in certain quarters.