Detroit-area mill offers March scrap significantly lower

A Detroit area steelmaker on Thursday morning announced significantly lower offers for March scrap shipments. The drop in its offer prices was larger than most industry observers had forecast, especially for shredded scrap.

Here are the prices being offered in the Detroit district:

#1 Busheling: $410 per gross ton (gt), down $70/gt
Shredded: $415/gt, down $50/gt
P&S: $370/gt, down $40/gt

Many in the scrap community had predicted that prime scrap would drop $40-50 per gross ton (gt) with shredded only down $30-40/gt. But other market participants were skeptical about these predictions given bearishness in ferrous markets, both domestically and abroad.

Detroit area offers are important because they often set the pace for other areas, including Chicago – which in turn tends to set the pace for the rest of North American scrap settlements.

We reached out to an industry veteran in the Chicago district to get his views on whether these prices would be accepted by the trade. “At the very least, I think they will be close,” he said.

Stephen Miller

Stephen Miller started his career in the scrap metal industry in 1978 at Luria Brothers in Cleveland. Over the last 40-plus years, he has worked in all capacities in the trading business. He has had positions in both domestic and international scrap trading. In addition to scrap, Miller was at the forefront of the pig iron trade and established a pig iron distribution company under the name of Ferrosource, Inc. Most recently, Miller has concentrated on the scrap export market and regularly does consulting for several companies in the industry.