Final Thoughts

Final thoughts: Ferrous market stagnates, EV shifts in other direction and tariff talks loom

Written by Gabriella Vagnini & Stephen Miller

After canvassing several scrap industry players, it seems the consensus for the ferrous market is basically sideways to slightly weaker for the next month, maybe two. The demand for scrap has slacked as mills are taking outages or just scaling back production. This is not that unusual as we go into summer. However, this year the mills are experiencing a downturn in HRC sales and pricing. They are only buying what they need to run at reduced rate. This is hanging over the scrap market even though scrap availability is starting to decline with lower prices.

The EV market consumer sentiment, as Gabriella Vagnini explains in her article, is a consequential change for both the automotive and steel segments. The non-ferrous and ferrous markets will be impacted if the demand for cars swings back to ICE’s. Some good, but mostly bad. The automotive sector has invested a tremendous amount of capital to accomplish this transition. It’s hard to predict what effects this will have over the next few years. Also, what about the carbon footprint a return primarily to the ICE will have on the plan for decarbonizing? There certainly has been a lot of time and money devoted to this, as well.

Mr. Leibowitz’s article on the Trump tariff proposal to substitute increased tariffs to replace individual income tax revenue says it all. Not only is it insufficient and unworkable, but it’s also likely to raise tensions in an already unstable world. Let’s hope it is just another mindless musing.

It’s hard to predict how interest rates and inflation will affect the recycled metals industry. We have been through economic adjustments before, and our industry has always held its own. Does anybody remember wage and price controls adopted by the Nixon Administration in the 1970’s? Somehow our industry came through that without a mark. As long as we make prudent decisions, the industry will prosper regardless of some of the decisions on economic matters.

It should all be interesting when reviewing the results of our scrap survey next week. Please feel free to participate. Click here to take the survey.

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