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| Ferrous scrap price |
Prime Ferrous Scrap Widens Price Spread Over Obsolete Grades Amid Global Steel Shifts
Steel mills in the United States currently pay an average of $105 more per ton for prompt industrial scrap compared with No. 1 heavy melting steel (HMS). Transaction pricing gathered by the Raw Material Data Aggregation Service (RMDAS) of Pittsburgh-based MSA Inc. highlights this growing divergence in the ferrous scrap market. However, this widening gap occurs while traditional offshore demand remains remarkably tepid.
Drivers of the Price Spread and Global Market Pressures
Historically, the market values prompt scrap more highly because of its consistent chemistry and relative scarcity. Meanwhile, U.S. mills paid an average of $471 per ton for grades in the RMDAS prompt industrial composite mix, while No. 1 HMS fetched $366 per ton. As a result, buyers paid $416 per ton for shredded scrap, sitting midway between the two benchmarks.
Chinese Steel Exports Impacting North American Recyclers
Global steel end markets remain relatively healthy, yet cheap semi-finished steel from China continues to flood international destinations. Elevated Chinese steel exports bypass melt shops and flow straight to rolling mills in Turkey, Malaysia, and India. Therefore, regional recyclers near seaports experience direct ripple effects from these macroeconomic shifts.
ScrapInsight Commentary
The persistent spread between prime and obsolete ferrous scrap underscores structural supply imbalances driven by cheap semi-finished steel imports. While domestic industrial grades command premiums for consistent chemistry, sluggish offshore demand from key export destinations limits broader market recovery. Consequently, recyclers must navigate margin pressures until global trade flows rebalance.
