Industrial Insight

Scrap… | September 24, 2010

The Friday Report: September 24, 2010
Bob Garino, ISRI

First, some big picture numbers: Cumulative 8-month global steel production was placed by the WSA at
932 mmt, up 22% from a year ago and just slightly above 2008. Annualized, we’re looking at 1.398 billion
mt of steel for 2010. China’s output year-to-date was up 15% at 425.8mmt while the U.S. produced 54.5 mmt, up 56%. That’s a lot of steel around the world looking for end use markets.
For this month, MAR, for one, expects to see a decline in Chinese production partially offsetting the
seasonal increase leading, they believe, to either a nominal increase or a decline in global production. An
article in this week’s WSJ noted that mills in China were “…likely to cut production by 3% to 5%” by year
end. That looks to be a stretch. London-based MEPS is forecasting China’s crude steel production this year to hit 627.0 mmt, up 10.4% from last year’s 567.8 mmt.
So, where are we with respect to the domestic markets for finished steel and scrap? At our (fabulous)
Ferrous Roundtable last week, panel members were generally cautious with respect to the near term with
more attention given to what the global steel industry had experienced since the global recession took
hold of steel back in 2008. Speaker James Moss described the economic recovery as “slow and multispeed”
and one that will be led by the developing world, not the developed world. He estimated that steel demand in the U.S. would not see 100 million tons until 2014.
As for scrap’s role in meeting the demand both here and abroad, there was also general agreement that
scrap supply was more than adequate despite less than confident research available on the potential pool
of available obsolete scrap. Moss believes that if domestic steel demand increases as forecast, the U.S. could very well see “record setting scrap shipments by 2013.”
More current news, however, suggests a domestic steel market that’s unsettled at best with a degree of
pessimism about the near term. As widely reported, producer prices have increased in August and again
this month with the intention of securing $620/net ton for hot-rolled coil. Most published sources place HR
in a $570-$610/ton range. SMU, for one, reckons that the mid-point is $590/ton, the same with Platts’
Midwest reference price. Last week’s “SteelBenchmarker” placed its HR reference price at $599/ton and this week, SBB’s “Steel Index” has HR @ $582/ton.
And ferrous scrap? Latest indications place No.1 HMS at $343.17/gross ton, with shredded scrap at
$372.83/ton, and No.1 bushelings @ $434.50/ton, as reported this week by Scrap Price Bulletin. Again
referencing WSD’s “SteelBenchmarker” they have No1 HMS figured closer to $323/ ton with shredded scrap @ $358/ton.
For the month of September, RMDAS is referencing its No.1 HMS price @ $341/ton delivered…shredded
scrap @ $370/ton, and new production scrap @ $435/ton. Their HMS price was up $21.00/ton from their August 20th report.


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1 Comment »

  1. Hey! I would like to say thanks, for Giving interesting about HMS Scrap prices .. I will back very soon!

    Comment by Steelmint — December 20, 2012 @ 9:53 am

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About author

I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.







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