Source: Worldsteel Association, www.worldsteel.org

Ferrous scrap prices, as measured by pricing services in the United States and Germany, have receded minimally in the summer months but have largely held onto their value thanks to steady global demand from mills and foundries and continuing tightness in scrap supplies.

U.S. domestic scrap prices determined in the first 10 days of August by American Metal Market (AMM) in its Midwest Index survey showed prompt grades losing about $10 per short ton in value, following a pattern shredded and No. 1 heavy melting scrap (HMS) established 30 days earlier.

Prices paid by U.S. mills were not always uniform in the summer of 2016, as demonstrated by the regional price breakouts offered by the Raw Material Data Aggregation Service (RMDAS) calculated by Pittsburgh-based MSA Inc.

Source: Association des Constructeurs Europeens d’Automobiles, www.acea.be; *Europe figure includes EU28 + the EFTA (European Free Trade Association area)

The RMDAS June 2016 numbers revealed mills in its U.S. South region paid $14 per short ton more for No. 1 HMS on average than did mills in the RMDAS North Central/East region.

AMM export pricing calculated in early August showed a $15-per-short-ton spike in scrap purchased off the East Coast, while Pacific Coast operators languished in a market that experienced a $2-per-short-ton drop.

Nations that historically have ferrous scrap deficits continue to buy from North America and Europe, but a trend of declining volumes in international ferrous scrap trade now has lasted several years and continued in the first half of 2016.

Source: U.S. Census Bureau and U.S. Geological Survey, http://minerals.usgs.gov.

Regarding pricing in Europe, Germany’s BVSE (Bundesverband Sekundärrohstoffe und Entsorgung, or Federal Association for Secondary Raw Materials and Waste Management) says mill buyers in that nation were able to procure scrap in the July 2016 buying period at €10 to €15 per tonne less than the previous month, mirroring the modest decline in values seen in the U.S.

The traditional seasonal summer slowdown in Europe played a role, BVSE says. “The vacation period is automatically accompanied by a fall in demand on the one hand and, on the other, by a fall in scrap availability,” the group writes.

BVSE also cites the vacation mentality and lack of melt shop activity as factors for falling July scrap prices in Italy, France and the Benelux nations. Poland’s market showed a contrary spirit, according to BVSE, where mills that stayed productive had to pay €3 to €10 more per tonne for scrap in July.

Mills in Turkey remained active buyers in Europe in the summer of 2016. “It is estimated that just under 15 freight loads were purchased in Europe” in July, BVSE writes. “Exporters are of the opinion that prices have bottomed out and that further high import demand on the part of Turkish consumers could increase pressure on prices,” the group adds.