Just 6 months ago, we shared that the American Metal Market (AMM) divided the Chicago market into 2 categories: Historical Footprint and Expanded Footprint. The Historical Footprint is the original
“Chicago” index. The Expanded Footprint, introduced in January 2018, includes prices from 3 additional central Indiana steel mills and one Iowa steel mill. The AMM has published both indexes in tandem since January 2018. According to the AMM’s newest article in regard to the matter, “effective July 2, 2018 the words “historical” and “expanded” will be removed and Chicago Expanded will permanently replace “Chicago Historical.” The index will be renamed “Chicago” with the additional mills included in the price assessment.
Chicago is the first region to include remote scrap pricing in an “Expanded Footprint.” The mills included in the new expanded footprint have historically had to pay premiums to compensate for the additional freight from Chicago. AMM published both indicators in tandem for 6 months to give users ample time to adjust contracts to work with the new assessment.
Some AMM commodities like, Cut Structural/plate, No. 1 Bundles, and No. 1 Busheling have aligned seamlessly between the Chicago Historical and Expanded indexes. However, Machine Shop Turnings, No. 1 Heavy Melt, and No. 2 Heavy Melt have seen the largest disparity with an average difference of $15/gt. “The change in prices is a non-market adjustment and not a monthly price move,” AMM states.
In similar news, AMM’s sister publication Scrap Price Bulletin (SPB), previously known as Iron Age, will discontinue its own pricing. Based on a period of feedback, SPB’s Ferrous Scrap Price’s will mirror AMM’s Consumer Buying Prices. Some of the general changes will include one single value price instead of a range (High Side-Low Side) and adopting the AMM schedule. Prices will settle before the 10th of each month. The point of this proposed publication is to focus more on pricing used in the North American Region, especially consumer buying prices. The goal is merge the two publications to ensure the same prices. This new change will go into effect on January 1, 2019.
For more information on the new scrap metal price structures, contact us or call us at 773-778-3000 and ask to speak with one of our sales team members.