September/October 2012
Scrap price information services collect and distribute data that can guide scrap buyers and sellers. They have evolved from strictly print products to include e-mail or web-based products and live feeds of commodity exchange data.
By Ann C. Logue
The textbook approach to pricing is simple: Prices are determined by supply and demand, and businesses should charge prices that are high enough to cover all their variable costs and make a contribution toward fixed costs. In the case of scrap, this would be materials plus overhead. That theoretical guidance isn’t much help when you’re asked for a price quote, however. How do you cover your costs, maximize profit, and satisfy the material supplier when you don’t know what price you’ll get when you sell the material?
Scrap pricing services can’t answer every aspect of that question, but they can provide information about what a particular variety of scrap is selling for in your region, in other regions, and when it’s exported to other countries. And that information can be difficult to find in other ways. Sure, some scrapyards post their prices at their facilities or online (see “The Case for Price Transparency” on page 78), and scrap companies have a long history of surreptitiously calling their competitors to find out prices. But these services specialize in collecting and selling price information for scrap and related materials—in a few cases, they have been doing so for more than a century. Originally, these companies published prices in weekly or monthly newspapers, newsletters, or other publications. When prices changed slowly over weeks or months, that was sufficient. Today, when prices can change repeatedly across a single day, many companies provide prices more frequently via websites and electronic newsletters instead of or in addition to their print products.
These services can’t provide the exact information any single company needs to best run its business. They’re vulnerable to survey respondents who don’t provide accurate information, for example, and it can be difficult for analysts to gather all the pertinent information by their publications’ deadlines. “There’s criticism no matter who is publishing prices,” says Bob Garino, vice president of commodity services for Export Tax Advisors (Houston) and former director of commodities for ISRI. With these and other limitations, the greatest value most of these services can provide is to show trends, he says. Still, these services give scrap buyers and sellers another data point they can use when setting price quotes and negotiating deals. Many companies use them in contracts, setting prices they base on a specific reported price.
Though tracking prices might seem like a logical job for a trade association, antitrust laws make it difficult for associations to collect and report on current prices without running the risk of forecasting or otherwise signaling future prices, which is verboten. That’s one reason these price services exist—and can charge so much money: They’re independent. That’s also why price resources are most prevalent in large, diverse markets such as ferrous and less prevalent in markets with fewer participants, such as rubber. The services exist where the market is large enough to sustain them. Here’s a roundup of some of the popular price resources for common scrap commodities.
Metals
Many price services for metals are long-established companies that large business-information publishers have acquired. This consolidation raises concerns that it might result in less accurate information or fewer services, but it mirrors the consolidation in the scrap and metals-consuming industries and in the commodity exchanges: The Chicago Mercantile Exchange, now the CME Group, owns Nymex and Comex; the Hong Kong Exchanges purchased the London Metal Exchange in July. The exchanges themselves provide valuable price information on ores and mill products that factor into or relate to the market price for the metals in a given type of scrap. For example, the LME cash price for aluminum and the price for used aluminum beverage cans often move in the same direction, though the spread between them does not remain constant. Along the same lines, historically there’s been a relationship between the price of steel hot-rolled coil and ferrous automotive bundles.
Metal Bulletin, American Metal Market, Scrap Price Bulletin. The 130-year-old American Metal Market, 99-year-old Metal Bulletin, and their scrap-focused sister, Scrap Price Bulletin, are all subsidiaries of business information publisher Euromoney Institutional Investor (London).
Metal Bulletin (London), a weekly print magazine and website, provides pricing information on more than 900 metals, which the company’s reporters collect through phone and e-mail surveys of buyers, sellers, and traders at regular intervals. The reporters look at reported business as well as bids, offers, and market assessments by market participants, and they take into account transaction details such as delivery terms. It reports some prices daily, others weekly, and still others twice a week. It provides scrap prices for several types of aluminum and ferrous material.
Standard subscriptions consist of live news, metals prices, a 30-minute-delayed LME feed, the weekly magazine, e-mail alerts of daily and breaking news, and access to one year of archived news and prices for $2,845. That plus access to the 15-year archive is $5,462. A subscription to Metal Bulletin Connect adds to that live feeds of prices from the LME, Comex, Forex, and the Shanghai Futures Exchange, with subscription prices ranging from $5,025 to $8,877. Visit www.metalbulletin.com.
The New York-based American Metal Market launched a Midwestern ferrous scrap index in June, which it compiles in addition to several ferrous scrap export indexes for which it publishes monthly averages. The Midwest ferrous scrap index, published on the 10th of each month, gives prices for No. 1 heavy melting scrap, No. 1 busheling, and shredded automotive scrap. Buyers and sellers submit by phone or e-mail prices based on actual transactions for tonnage to be delivered in 30 days to the mill. A basic subscription with access to a year’s worth of prices is $1,775; full database access and a live LME feed is $2,640 a year. Visit www.amm.com.
Scrap Price Bulletin, formerly known as Iron Age, lists ferrous scrap prices for 32 different specifications in 18 markets. The exact methodology it uses for collecting prices varies with the commodity. Subscriptions that include weekly regional market reports, monthly special regional market reports, a historical pricing database, and charting functionality that allows up to four city-by-city or product-by-product comparisons of pricing are $1,165 a year for PDF, Web, and print-based news. Visit www.scrappricebulletin.com.
Platts, Steel Business Briefing, and The Steel Index. Platts (New York) acquired SBB and its TSI unit in 2011, expanding its roster of newsletters, real-time services, and end-of-day market data for metals.
Platts SBB Steel Markets Daily features all Platts and TSI ferrous scrap price assessments, covering the U.S., Turkish, Indian, Brazilian, European, and Asian physical markets. It also provides daily ferrous scrap news and includes the Platts SBB Price Analyzer, which allows customized comparisons of up to four price series in the same chart/graph and provides downloadable historical data.
Platts Metals Week features a full array of Platts’ nonferrous price assessments, including its benchmark for U.S. aluminum as well as several prices for copper and titanium scrap and other nonferrous metals. The weekly also contains data on supply and demand and other news updates.
Platts Market Data–Metals features two data packages—the Steel & Raw Materials package of 870 price references and the Metals package of 1,920 assessments, both of which include Platts and TSI ferrous scrap prices.
Platts Metals Alert, a real-time news service, contains more than 2,000 ferrous and nonferrous price assessments. The service soon will include legacy SBB and TSI prices.
The TSI Scrap Service offers daily and weekly prices for Turkey, India, and the United States; market commentaries; trade data and forward curves; plus a monthly analysis of the Turkish, Indian, and U.S. domestic markets. Customers also can download historical data and make multiple price comparisons on the same chart/graph. Visit www.platts.com (Products & Services, then Metals), www.steelbb.com, or www.thesteel
index.com for pricing information.
MetalPrices.com, RMDAS, and The Fish Scale. Since 1995, MetalPrices.com (Basalt, Colo.) has offered a monthly ferrous scrap price index that the company’s market specialists create based on interviews with dealers, brokers, and consumers. The index gives prices for 11 grades of scrap sold in Chicago, six in Cincinnati, six in St. Louis, and five in Houston. The website also offers live LME and Comex feeds; visitors can use an alloy calculator on the site to enter the chemistry of a particular type of scrap and find prices based on the exchange value of the metals involved. The company also offers access to its services via smartphone. Visit www.metalprices.com.
A subscription to MetalPrices.com includes access to two other pricing services, the Raw Material Data Aggregation Service ferrous scrap price index from Management Science Associates (Pittsburgh) and The Fish Scale. MSA reports weighted-average price and volume data to participating companies for more than 90 scrap commodities. The prices are based on actual purchase-order data MSA receives from a “significant number” of electric-arc furnace minimills and integrated steel producers in North America, the company says. MSA updates price and volume data on the website for RMDAS participants as it receives the data; it publishes the transaction-based RMDAS ferrous scrap price index each month. The index provides aggregated, weighted-average regional spot market prices for scrap commodities on the 20th day of each buy month and makes the information available to various publications.
The Fish Scale, compiled by Arnold Fish of Mansfield, Ohio, is an index of the average prices of aluminum sheet, cast, turnings, and mixed low-copper clips and solids submitted by seven U.S. smelters. It is designed to be a monitor of price changes more than a guide to current prices, Fish says. Subscription prices vary according to the type of LME and Comex feeds selected. For $3,300 a year, subscribers get access to live LME and Comex prices; service with delayed price data is $640 a year.
Peony Online and MetalExchangeDirect.com. Peony, founded in Montvale, N.J., in 1993, functions primarily as an exchange for buyers and sellers of scrap. Its subscribers contribute bids and offers, listing their names and phone numbers; Peony uses that data to calculate the daily Peony C/B/E Price Report (the letters stand for Consumer/Broker/Exporter). The report covers 70 different scrap specifications, with specified delivery terms.
Peony is the parent company of MetalExchangeDirect.com, which tracks prices for primary materials and finished products. An online daily subscription to MetalExchange
Direct.com—with commodity exchange data and a news service, but no scrap prices—is $450 a year. Daily electronic delivery of Peony C/B/E data is $540 a year. Visit www.metal
exchangedirect.com.
GlobalScrap.com. The Westmont, Ill.-based GlobalScrap.com service focuses on nonferrous scrap. For $470 a year, subscribers can enter orders to trade and thereby contribute to the online database of prices for many grades of copper, aluminum, stainless steel, nickel and alloy, zinc and lead, and electronic scrap. The types of prices provided vary, but they are specified for each commodity. The prices are based on surveys of site participants, including their buy and sell offers. Visit www.globalscrap.com.
Strategic Scrap. StrategicScrap.com tracks both regional monthly ferrous pricing and transportation bids. The Cedar Falls, Iowa, company conducts phone surveys to get data on actual transactions from market participants. The price details vary by grade but are disclosed. The company also offers daily LME and Comex feeds; the total package is $699 a year. Visit www.strategicscrap.com.
Steel Market Update. Steel Market Update (Dawsonville, Ga.) reports prices for several ferrous metal categories, including four scrap grades: monthly prices for No. 1 heavy melt, No. 1 busheling, and shredded scrap, plus a weekly index of shredded scrap. It collects data from an “invited” group of subscribers it says are representative of the market. The company, founded in 2008, also provides a proprietary market-sentiment assessment and forecast ranges. Online access is $895 for an individual, $1,000 for two employees, $1,500 for up to five employees, and other price points for larger quantities of subscribers at one company. Visit www.steelmarketupdate.com.
iScrap App. The free app, which launched in March 2011 and is available for iPhone, Android, and BlackBerry devices, helps scrap sellers find scrapyards. Scrapyards pay to list their inventory and pricing through the app and on the iScrapApp.com website. It’s more of an advertising service than a price index, but because some companies list their prices, others can use it to gather data on prices in a specific market. Visit www.iscrapapp.com.
Scrap Monster. Scrap Monster (Montreal) is an online service that tracks a large number of scrap markets, including 43 scrap metal grades, precious metal jewelry, and electronic scrap. It even has prices for scrap Christmas lights. It’s more of an exchange than an index service, and prices are based on different bids and offers listed by members. Limited access is free; silver-level membership is $150 a year; gold-level membership is $500. The silver and gold memberships feature varying degrees of product listings, messaging, and priority search positions in the database. The company was founded in 2011; it acquired some scrap-related domain names in June 2012 to get more traffic and more participants to the site. Visit www.scrapmonster.com.
Paper
Official Board Markets and Pulp & Paper Week. The major player in the paper market, Official Board Markets (Skokie, Ill.), offers several different pricing services. RISI, a Boston-based division of United Business Media, acquired the company in 2011. OBM collects its prices via telephone surveys. Mark Arzoumanian, who has edited the publication for 24 years, says the service’s relationships and reputation help with the data-collection process. It provides regional domestic prices (not including freight) and export prices (including freight) from Los Angeles, Chicago, and New York for OCC, No. 8 news, and mixed paper. The service is $245 a year for weekly digital delivery, $270 for print, and $340 for a subscription that includes e-mailed price data. The e-mailed prices alone are $270 a year. Visit www.obm-digital.com.
PPI Pulp & Paper Week, also from United Business Media, publishes 48 times a year in print and online. It calculates weekly prices for several pre- and postconsumer recovered paper grades for transactions in New York, Chicago, Atlanta, San Francisco-Los Angeles, and Dallas-Houston as well as a U.S. average. The magazine is $1,297 a year for the North American edition; the Asian edition is $1,180; the European edition is €980; and the Latin American edition is $980. Each tracks similar scrap categories. Visit www.risiinfo.com.
The Paper Stock Report and Paper Recycling Online. The Paper Stock Report lists prices paid in spot transactions for loose material by scrap dealers and for baled paper by mills. The firm emphasizes the analysis behind the prices more than the prices themselves. An annual subscription of 24 issues is $308 for both the print Paper Stock Report and access to its website, Paper Recycling Online. Both are published by McEntee Media Corp. (Strongsville, Ohio). Visit www.recycle.cc.
Mill Trade Journal’s Recycling Markets. Recycling Markets is one of several publications from NV Publications (Avon-by-the-Sea, N.J.). It contains pricing of scrap paper grades and news about the recycling industry, including feature articles and supplier products. A subscription is $119 a year for 24 issues. Visit www.nvpublications.com.
Plastics
PetroChem Wire. PetroChem Wire (West Orange, N.J.) launched a twice-a-month recycled plastics price service, the Repro-Regrind Resin Report, in 2010. This report lists prices for 50 types of flake and pellet grades on a price-per-pound basis, assuming truck delivery in boxes originating on the East Coast. The analysts collect data on confirmed deals, bids, and offers in their surveys, which they conduct through conversations with producers, consumers, traders, brokers, and others. The company does not track prices for unprocessed scrap resin but could add those prices in the future. The report is available online, as an e-mailed PDF, and via the Bloomberg terminal. Visit www.petrochemwire.com.
Plastics News. Plastics News, an Akron, Ohio-based publication of Crain Communications (Chicago), lists prices for prime and recycled plastics in its weekly print edition (except four times a year when it releases two-week combined issues) and on its website. The virgin prices cover a variety of resins under the categories of thermosets and commodity, high-temperature, and engineering thermoplastics; its recycled plastic prices encompass 16 grades of ABS, polycarbonate, polyethylene, PET bottles, polypropylene, polystyrene, and PVC. Plastics News also summarizes the CME Group exchange settlement prices for prime PP, HDPE, and LLDPE. The print edition for U.S. recipients is $89 for one year or $149 for two years. The publication posts its prices for free on its website, but only paid subscribers can access historical resin pricing data and graphs. Visit www.plasticsnews.com.
The Plastics Exchange. This Chicago-based real-time, online marketplace for commodity-grade resins provides 11 spot and contract prices for prime and off-grade resins, including injection- and blow-molded HDPE, injection- and film-grade LDPE and LLDPE, homopolymer and copolymer PP, HIPS, GPPS, and high-molecular-weight PE. The open-access site also offers in-depth research, news coverage of the resin marketplace, and a weekly market update, which also is available by e-mail. Visit www.theplasticsexchange.com. (Plastics Today [Los Angeles] also features The Plastics Exchange price information on its site at www.plastics
today.com.)
One additional general scrap-price resource is ScrapIndex.com from RecycleNet Corp. (Salt Lake City), which provides spot, composite, and historical price information on a wide range of scrap commodities as well as information services on recycling market trends. The company generates its pricing data and market trend reports from proprietary internal data culled from its Recycler’s Exchange and Recycling Offset Credit Reports. Visit
www.scrapindex.com.
Ann C. Logue is a Chicago-based writer.
Scrap price information services collect and distribute data that can guide scrap buyers and sellers. They have evolved from strictly print products to include e-mail or web-based products and live feeds of commodity exchange data.