News & Announcements
The AMM Shredded Scrap Index for Chicago has declined and stands at $325/GT as of mid Nov ’14, down $50/GT from early Oct ‘14.AMM Shredded Chicago scrap is generally used as an indicator by most domestic electric arc furnace mills to help determine price changes for finished steel products.Market participants are forecasting another decline in scrap prices over the coming month.A stronger USD continues to have a damping effect on globally traded commodities including scrap.
Mill lead times are roughly 9-12 weeks for delivery from the Midwest with 5-6 week lead times from the West Coast.Domestic plate mill prices for West Coast delivery have eased modestly by roughly $20/ton.Even though demand is stable, prices are under some year-end pressure due to larger inventories, increased import volumes, and declines in raw materials and fuel including iron ore, scrap, and oil.Prices are not expected to increase in the next 30 days.
Mill lead times are roughly 6-7 weeks from the West Coast and 8-11 weeks for delivery from the Midwest.Midwest sheet mills recently issued price increases of $20/ton after recent price erosions.However, the market is mixed whether or not the announced price increases will stick.Competitively priced sheet imports are receiving a boost by a stronger USD.
Tube mill rolling cycles are holding at roughly 5-6 weeks for West Coast tube mills.Overall demand for tube on the West Coast has improved, but imports and recent downward price pressure on sheet has contributed to modest tube price declines by roughly $20/ton in the past month.Prices are not expected to increase in the coming month unless the recent coil/sheet announced price increase does indeed stick.
Lead times remain at roughly 4-7 weeks for most production runs on the West Coast.After domestic mills raised prices in Jan ’14, the domestic market has been flat for the past nine months.Market participants are mixed as to whether or not recent scrap price declines will translate to a price decrease for merchant bars.Prices are not expected to increase in the coming month.
Lead times are roughly 6-8 weeks for West Coast delivery.Gerdau and Nucor announced a $20/ton price increase in Mar ’14, but prices have remained unchanged for seven months.Reduced oil prices are starting to soften delivery costs.Prices are not expected to increase in the coming month.
Scrap prices decreased $50/GT in the past month and are expected to soften again in the coming 30 days, but may start to reverse course by midwinter due to seasonal trends.As with last month, domestic steel prices are not expected to increase in the coming month and may soften in some product lines based on a mix of increased supply and lower input costs.According to the Institute of Supply Management (ISM), the overall economy grew for the 65th consecutive month.ISM indicates domestic manufacturing expanded with a reading of 59 for Oct ‘14, which is up from a Sep ’14 reading of 56.6.The ISM New Orders and Production Index also reported readings of 65.8 and 64.8 in Oct ’14 changing from 60 and 64.6 in Sep ’14 respectively.ISM readings greater than 50 signal expansion. The US Labor Department showed non-farm payrolls increasing in Oct ‘14 by 214,000 jobs with an unemployment rate of 5.8%.Updated figures from the US Department of Commerce indicates that GDP grew at an annual rate of 3.5% in Q3 ’14 and 4.6% in Q2 ’14, which was up from a revised 2.1% decrease in Q1 ‘14.
Sources include:AMM, ISM, Bloomberg, AP, US Labor & Commerce Departments, Domestic Steel Mills