Busheling and shredded tags drop, widening HRC vs. prime scrap spread

SMU’s October scrap pricing stands at:

• Busheling at $375- 405 per gross ton (gt), averaging $390/gt, off $15 from September.
• Shredded at $360-380/gt, averaging $370/gt, down $10 from September.
• HMS at $315-345/gt, averaging $330/gt, even with September.

(For a recap of the October market, click here.)

Looking ahead, one source told SMU, “My sense is that October is a market bottom for scrap pricing, though I don’t know that we pop back higher in November. Could be December until we move higher again.” 

HRC vs. prime scrap spread widens

The price spread between prime scrap and HRC widened marginally this month, according to SMU’s most recent pricing data.

SMU’s average HRC price as of Oct. 14 was $800 per short ton (st),  FOB mill, east of the Rockies. That’s up $5 from the previous week and $15 from a month earlier.

Meanwhile, busheling tags for October dropped $15/gt from September (referenced above) to an average of $390/gt.

Figure 1 shows price histories for each product.

After converting scrap prices to dollars per short ton for an equal comparison, the differential between HRC and busheling scrap prices was $452/st as of Oct. 16. That’s up $14/st from last month (Figure 2). 

HRC premium as a percentage 

The graph on the right-hand side of Figure 2 shows the spread relationship differently: We have graphed HRC’s premium over busheling scrap as a percentage. HRC prices now hold a 105% premium over prime scrap, up from 98% a month ago.