Heavy Melting Steel, universally known as HMS in the scrap metal industry, is the most widely traded ferrous scrap grade in the world. If you work in steel recycling, manufacturing, or trade, HMS pricing directly affects your bottom line. Understanding how these prices are set and what drives them is fundamental to operating in this market.
What Is HMS?
HMS refers to obsolete steel scrap that is heavy enough to be charged directly into a furnace. The ISRI Scrap Specifications Circular divides it into two primary grades.
HMS 1 (ISRI codes 200-206) requires wrought iron or steel scrap at least one-quarter inch in thickness. Individual pieces must be no larger than 60 inches by 24 inches to fit standard furnace charging boxes. Common sources include structural steel from demolition, heavy plate, rail, and large-diameter pipe.
HMS 2 (ISRI codes 203-205) permits a broader mix that includes lighter-gauge material. Sheet metal, auto body clips, and thinner structural sections qualify. Because it requires more energy to melt and may contain more impurities, HMS 2 trades at a discount to HMS 1, typically $20 to $40 per gross ton less.
How HMS Prices Are Set
Unlike exchange-traded commodities with a single reference price, HMS pricing is regional and negotiated. Mills publish buy prices based on their melt schedules and inventory levels. Brokers and dealers negotiate based on volume, quality, delivery terms, and transport costs.
Several benchmarks exist. The export market, particularly shipments to Turkey, establishes a global floor price. Domestically, published indices from Fastmarkets and other trade publications aggregate transaction data. CME Busheling futures also influence HMS pricing indirectly, since Busheling and HMS compete as furnace feedstock.
Key Price Drivers
Steel mill production rates are the single largest driver. When mills run at high capacity utilization, they need more scrap and prices rise. Mill outages, whether planned maintenance or demand-driven idling, reduce scrap demand and push prices down.
Export demand matters enormously. The US is a major scrap exporter, and when Turkish or Asian mills are buying aggressively, domestic prices get pulled up. Freight rates affect this dynamic, as higher shipping costs reduce the effective export price.
Scrap supply is seasonal. Collection rates drop in winter months in northern regions, tightening supply. Demolition activity, manufacturing output, and auto obsolescence all feed the supply side.
Accessing HMS Price Data
For developers and analysts who need HMS pricing in their applications, the ScrapMetal API provides current prices for both HMS 1 and HMS 2, updated daily from aggregated public sources. You can query by grade or ISRI code and receive structured JSON suitable for dashboards, alerts, or integration into trading systems.