SMU Panelist: Scrap Prices Poised to Rise

Ferrous scrap prices are poised to rise in the NAFTA region for several reasons, says John Harris, CEO of Aaristic Services, Inc., and former director of Raw Materials for ArcelorMittal. Harris is part of a panel that will take a deep dive on commodities during the Steel Market Update Steel Summit Conference Aug. 28-30 in Atlanta.

Scrap is in high demand for the following reasons, Harris explains:

· Mill utilization rates have risen by 2 percent to approximately 76 percent, which means the mills must source an extra 110,000 metric tons of scrap.

· Export cargoes have again kicked in representing approximately a 200,000-ton demand from NAFTA (for September delivery).

· Nucor’s DRI facility in Louisiana is down for an outage, causing greater demand for premium scrap.

· Turkey is an aggressive scrap volume buyer as Chinese billets and rebar are over $550 per metric ton.

· Fall scrap buildups begin in August to build winter inventories gradually.

· China steel demand has escalated as government infrastructure projects have created a higher demand. Chinese steelmakers are on pace to produce 60 million tons more than 2016.

Harris predicts obsolete scrap could rise by $20 to $30 per ton, and prime scrap by $40 to $60 per ton in the near term. Look for him to expand on his forecast during the panel discussion beginning at 10:35 a.m. on Tuesday, Aug. 29, at the Georgia International Convention Center.