Week in Review: Post-election questions

Overall, the scrap market stayed tight through October. As RMU’s parent company CRU Group reported, China’s demand for imported scrap remains strong, often paying top dollar, while North America’s new recycling expansions continue to keep the market constrained. One big question is whether rolling mills might switch to primary aluminum if scrap prices keep climbing. However, environmental concerns and challenges with GHG emissions associated with primary aluminum could make this switch challenging.

Meanwhile, the U.S. and Canadian ferrous scrap markets for November have not settled following the election, as RMU’s Stephen Miller notes. There doesn’t seem to be a key indicator as to why November prices haven’t settled yet. You can read more about what’s happening here.

On Thursday, the Federal Reserve cut interest rates by a quarter percentage point, its second consecutive reduction in the cost of borrowing. As Axios reports, the Fed is gradually loosening its grip on the economy as inflation cools and the job market holds steady, though Trump’s proposed economic policies risk disrupting that balance. Many companies have been banking on lower interest rates to spur manufacturing and construction, which in turn boosts scrap demand. Lower rates also make it cheaper to manage loans and expand operations.

Economic highlights