Recycled steel prices in the United States saw a notable increase in January, with prices rising by $20 per ton or more in several regional markets, according to a report from Davis Index. The first half of the month saw stronger bids from domestic mills as they faced the dual challenges of rebuilding inventories and weather-related disruptions in scrap collection and transportation.

Price Increases and Regional Variations

The average price increases were observed across various benchmark grades of recycled steel, including No. 1 heavy melting steel (No. 1 HMS), shredded steel, and No. 1 busheling (prompt scrap). Prices in regions such as Chicago, Cleveland, and Birmingham, Alabama, saw higher bids in the first half of January. Some regional markets experienced even larger gains, such as a $30-per-ton increase for machine shop turnings in Cleveland and a $28-per-ton rise in Birmingham.

In particular, the price of prompt scrap followed the same upward trend as shredded and cut grades. Despite the price increase, some processors were hesitant to sell at the newly adjusted rates, leading to some sellers withholding scrap tonnage from markets where they expected higher prices. The disruption of supply due to winter storms, which affected scrap collection and transportation, helped drive this demand for inventory restocking from mills.

Impact of Weather and Export Market Considerations

Winter storms across the U.S. contributed to disruptions in the supply chain. The storms hindered the flow of ferrous scrap from key regions such as the South and Midwest, particularly in states like Arkansas, Tennessee, and the Carolinas. These storms delayed construction and demolition activities, reducing scrap generation and slowing recycling operations.

While domestic scrap demand increased, the outlook for the export market was less optimistic. In early January, the U.S. recycled steel export market was unlikely to add upward pressure to prices. Bulk shipments of heavy melting steel (HMS) from U.S. ports were trading lower than expected, with prices at New York and Los Angeles ports down from December figures.

Despite these challenges, the industry saw some stability, with concerns over a potential work stoppage at U.S. ports being alleviated after a tentative settlement between the International Longshoremen’s Association and the United States Maritime Alliance. This prevented further disruptions to outbound shipments.