Final Thoughts

Written by Stephen Miller

The North American ferrous scrap industry took a blow last week when busheling prices dove $40/gt-$50/gt.

Other grades did not suffer to this extent, only dropping $20/gt-$30/gt.

Ray Peterson pointed out in his monthly column that steelmakers in the U.S. took busheling down $40/gt, basically because they could.

There were numerous outages and HRC demand was softer. But why not treat shredded and other obsolescent grades likewise?

He explained that many mills today operate shredders, so they can see the difficulties of profitably running a shredding operation. This points to the conclusion most are making now — shredded prices can only drop so far before sufficient generation becomes a problem. Have we reached a floor on this important grade?

Gabriella Vagnini’s article on the “cash and carry” trade brings home what it can mean for recycled non-ferrous metals at the dealer level. Having the awareness, as she points out, can be of benefit on how to manage inventory and pricing decisions. In other words, when to sell, hold, or buy!

Lewis Leibowitz pointed out the glaring differences between the recycling of plastic waste and the recycling of scrap metals. Hopefully, a solution can be found for plastics before they spread all over the place.

We in the scrap industry should keep tuned to China’s proposed relaxation of ferrous scrap specifications which could open that country to the importation of the bell weather export grade HMS #1/#2 80/20.

For the last several years, domestic prices in China were low enough where it would be hard to attract deep cargoes of this grade. Many thought that China’s internal generation of usable scrap would create a surplus of ferrous scrap on the world market. Those folks apparently overestimated the development of the Chinese scrap industry.

The Chinese steel industry is so large that even what they consider a small purchase of HMS 80/20 could have major effects in the worldwide scrap market. This may not happen, at least for a while. But if it does, don’t be surprised if there will be calls for export controls or possibly limitations of some kind on ferrous scrap.

Latest in Market