Steel Abrasive SCV

WHAT IS THE SCV?

Steel Scrap is the raw material used in producing steel shot and grit. The price for steel scrap, which is a commodity, varies from month to month.

The Scrap Cost Variance (SCV) is an index that follows trends in the steel scrap market. The industry has picked a marketplace (Pittsburgh) and a type of scrap (low phosphorus punching and plate) as the reference price for SCV. In order to quote a price the SCV is added to the base price. All cast steel shot and grit manufacturers incorporate the same calculations to factor SCV into their pricing systems.

HOW IS THE SCV CALCULATED?

The SCV is calculated from the “Iron Age Bulletin” scrap prices published in New Steel Magazine. This magazine issued for the month is used to calculate the SCV for the month. The calculation becomes effective on the 1st of the month and continues through the end of the month.

When the system was put into place in 1979, the cost of punching and plate was $90 per ton. It was then decided that this $90 per ton would remain constant in the calculation. To arrive at the current SCV, $90 is subtracted from the published price of scrap for the month.