AMM Midwest Scrap Index, No. 1 Busheling (blue circles): All prices are effective the 10th of the month or the following Monday if the 10th falls on the weekend. RMDAS Ferrous Scrap Price Index (black squares): Per gross ton for No. 2 shredded scrap, defined as 0.17 percent or greater copper content, effective the 20th of each respective buy month.

Several months of stability and even gently rising prices in the ferrous scrap market came to an end with the October buying period, as both domestic mills and overseas buyers came into the market with lower offers.

American Metal Market (AMM) October pricing indices pointed to a more than $40 per ton drop for prompt grades shipped to domestic mills, while shredded scrap in the domestic market dropped nearly $30 per ton.

The East Coast export market, often driven by Turkish buying, was no kinder in early October, dropping by $45 per ton, according to AMM. The West Coast market, which had never really spiked in the first place, dropped by only $7 per ton.

By mid-October, World Steel Exchange Marketing (WSEM) analyst Mike Marley was reporting that Turkish buyers were re-entering the market on the dip, potentially pointing to a rebound in the overall market in November.

Marley also reported in mid-October that containerized shred buyers shipping to the Indian subcontinent and Southeast Asia were upping their bids by some $10 more than the published early October prices to likewise take advantage of the price dip.

To what extent such activity will affect the domestic market won’t be fully known until early November, but domestic steelmaking activity remains steady, as does the status of several of steel’s major markets.

The Washington-based American Iron & Steel Institute (AISI) has reported that in the week ending Oct. 7, 2017, domestic steel production was 1.74 million tons at a mill capacity rate of 74.7 percent. That is 5.2 percent more output compared with the 1.65 million tons produced in the comparable week in 2016, when the mill capacity rate was 70.8 percent.

As far as week-to-week momentum, the 1.74 million tons produced in the week ending Oct. 7, 2017, increased by 2.1 percent from the previous week, and the 74.7 percent mill capacity rate represented an upgrade from the previous week’s 73.2 percent rate.

Year-to-date production of steel in the U.S. through early October 2017 was 69.5 million tons at an average mill capacity rate of 74.6 percent, AISI says. That is up 3.7 percent from the 67 million tons made during the same period last year, when the capacity rate averaged 72.2 percent.

In terms of steel’s end markets, the construction sector in the U.S. has enjoyed a largely solid 2017 as measured by a couple of indicators assembled by the Virginia-based Association of General Contractors (AGC).

Construction spending figures for August 2017, released in early October, show an overall increase of 2.5 percent from a year earlier. Much of the increase is thanks to 10 percent year-on-year growth in the commercial sector, which includes retail, warehouse and farm construction, and 11 percent growth in residential construction.

The lack of progress in public or infrastructure spending, which seemed like a potential area of cooperation between the Trump administration and members of both political parties in Congress, has disappointed several steelmakers.

According to the AGC, year-on-year highway and street construction has declined by 6 percent, while spending on sewage and waste disposal has plummeted by 16.1 percent so far in 2017 and spending on water supply has dropped by 6.4 percent year over year.

The AGC is among the groups advocating for the federal government to prioritize infrastructure spending, whether as part of tax code reform or separately. Association officials say efforts to reform the tax code provide an opportunity to spur private sector firms to make new investments in transportation that serve their interests.

In addition to the tax code and infrastructure spending, the other Washington-related development that could affect the ferrous market soon is President Trump’s promised Section 232 trade protection for the U.S. steel sector.

Robert Kimmel of Detroit-based Kimmel Scrap Iron & Metal (featured in the article “Making it personal,” starting on page 32), says the initial enthusiasm for this move in the steel and scrap sectors has been put on hold. “Initially, many in the steel industry thought it would be put into place quickly, in 60 to 90 days. This created a buzz in the scrap sector with expectations it would push prices up. As a decision dragged on, the bullishness subsided, and I believe the consensus now is that it will happen when it happens, and we’ll respond more logically then.”

The auto industry’s fortunes in late 2017 and into 2018 also will help determine steel consumption and ferrous scrap demand. While some analysts have seen reasons for concern, the 2017 hurricane season has provided an interim boost.

Commerce Department data for September 2017, as reported by Reuters, included a 3.6 percent jump in receipts at auto dealers and a 2.1 percent rise in sales at gardening and building materials stores.

Additional RMDAS (Raw Material Data Aggregation Service) pricing from Pittsburgh-based Management Science Associates (MSA) is available on the Recycling Today website at

The American Metal Market (AMM) Midwest Ferrous Scrap Index is calculated based on transaction data received that are then tonnage-weighted and normalized to produce a final index value. The AMM Scrap Index includes material that will be delivered within 30 days to the mill. Spot business included after the 10th of the month will not be included. The AMM Ferrous Scrap Export Indices are calculated based on transaction data received that are then tonnage-weighted and normalized to produce a final index value. The detailed methodology is available at *FOB New York, in metric tons; **FOB Los Angeles, in metric tons.