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According to just-published data from American Metal Market (AMM), May prices for shredded scrap (obsolete) remained unchanged at $430/ton, while #1 busheling (prime) scrap fell a modest $3/ton (or 0.7%) to $445/ton.

In late April, steelmakers themselves were expecting to have to pay higher scrap prices, as the market for shredded scrap in particular had been tightening up, and with a reported deal done up $5-10/ton just last week, we had suspected to see a modest uptick for obsolete grades for the month.  However, we have seen a weakening in global steel prices in recent weeks on slowing demand, so that the likely culprit for flat – instead of higher – pricing is the decline in overseas demand for US scrap.

The slight drop in prime scrap pricing is less surprising, as we believe that increased supply from stronger manufacturing activity is in balance with rising domestic steel production levels, which has led to modestly higher scrap demand.

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