The February price collapse in the auctions of auto bundles also dragged down the market prices for other ferrous scrap grades. Merchants had seen marginal price increases in late 2000 because of disruptions to supply brought about by harsh weather conditions and by re-stocking of scrap inventories at domestic steel mills. However, the price for the auto bundles for February deliveries fell sharply by $20/gross ton.

In turn, steel mills throughout the East Coast and Midwest have been offering $10-$12 less for cut grades and $10-$15 less for shredded through April deliveries, according to merchants. This put processed scrap prices near 10-year lows with shredded at $90/short ton and cut grades at an average $80/short ton. Some steel mills have allowed scrap inventories to run down because of reduced steelmaking levels. (Domestic steel mills have been under 80% of finished steel capacity this year.)