US Midwest shredded steel scrap

Data is collected from active market participants across the supply chain in the North American scrap market, including trades, bids and offers on a delivered Midwest basis.

Data is normalized to reflect the value of the commodity on a given day, for typical order quantities, commodity specifications, and standard delivery and payment terms.

Platts began assessing US shredded scrap metal on February 7, 2005.

After the July 1, 2011 merger with Steel Business Briefing, the Platts assessment was merged with the existing similar Steel Business Briefing assessment Midwest shredded scrap assessment.

On November 1, 2017 Platts merged its US scrap price assessments with The Steel Index equivalents.

This meant that Platts started to calculate the delivered mill scrap prices in the US using a volume-weighted average, rather than a market-on-close assessment approach.

Since October 1, 2021 Platts has adopted a Market on Close (MOC) approach to assessing the US scrap market.

The Platts MOC approach to assessing prices is based on the philosophy that price is a function of time. As such, the MOC process yields assessments that are reflective of market value at the close of the typical trading day.

Platts has established clear guidelines for how data is collected, prioritized, and published as part of this process. Under these guidelines, Platts publishes market information including confirmed transactions, firm bids and offers and indications of value throughout the day for the market to see and test.

Platts gives the greatest priority to fully verifiable and transparent market information. Platts considers that a confirmed, verified trade may represent value for the entities involved in the transaction, whereas an unfilled, but confirmed and verified, bid or offer open to the market represents value for the whole market. As such, Platts prioritizes competitive bids and offers that stand at the close of its assessment process above previously reported transactions.

When no transparent bids, offers or transactions are recorded, Platts may consider other verifiable data reported and published through the day. This may include partially confirmed trades, notional trading values and other market information.

The MOC assessment process is suited for all levels of market liquidity. It gives priority to the most specific, transparent, and actionable data. It enables markets to react more quickly to changes, as data can be viewed by market participants in real-time through the publication of "heards in the market".

Heard

Platts Steel, HRC/US: Transaction at $1,900/st for 1,000 st from an integrated producer: Midwest service center

Timestamping

By assessing at a specific time – for US ferrous assessments, that means data is collected until 3:30 pm Eastern – the Platts MOC process is designed to reflect values up to the end of the pricing window.

Standardized specifications

Data is normalized back to standard quality, volume, timing of delivery, terms, and other parameters to ensure like-for-like comparisons.

How does publishing assessments more frequently help navigate volatility?

Volatility in the steel industry is nothing new, but price cycles have grown more extreme. Competitive prices for buyers and sellers change more frequently. Lagging data can cause distortions in volatile markets.

While less frequent assessing might seem to even out the cyclical nature of steel pricing, in fact, daily monitoring yields a more consistent outcome and helps ensure the most up-to-date snapshot of a market. Platts US benchmark steel prices, such as hot-rolled coil, are assessed on a daily basis.

Daily data points lead to a more robust monthly average, with less weight given to a single day compared with a weekly approach that includes only four or five prints per month. In many cases, monthly averages are used as the basis for settlement of derivatives contracts.

Even when markets lack liquidity, commodities still have value. This is evident in exchange-traded markets where even if there is no trading taking place, there is still a value for the commodity published each day. Financial requirements are such that many companies need to be able to mark to market their inventories or positions every day, as well.