Recyclers look to 2025 for boost in supply, demand

“The long-term demand for recycled metals is supported by structural deficits for non-ferrous metals such as copper, the increased demand from manufacturers to maximize their use of recycled materials, and the growth in electric arc furnace steelmaking capacity, which uses ferrous scrap as its primary raw material,” Tamara Lundgren, chair and CEO, said during the company’s fourth quarter earnings call last week.

“We expect that continued reductions in U.S. interest rates, along with the spending associated with the U.S. Infrastructure bills, will be major catalysts leading to higher manufacturing, construction, and consumer activity, and higher scrap flows,” she said.

U.S. manufacturing activity has been contracting for 22 of the last 23 months, according to the Institute for Supply Management (ISM).

Other companies are also more optimistic looking ahead, including Nucor, in its third quarter earnings call.

Still, the chief executive of the Charlotte, N.C.-based steelmaking and manufacturing conglomerate said it will take time to see those effects.

“The Federal Reserve’s recent actions are a good start, but it will likely take more time, more rate relief and looser lending conditions before we start to see the flow-through effect in the construction, industrial and consumer durables market that are so impactful to steel demand,” Leon Topalian, chair, president and CEO, said last week during the company’s earnings call.

Still, several markets remain quite healthy, he noted.

“For example, construction related to semiconductor factories, advanced manufacturing facilities, data centers, and institutional buildings is still very strong. There are some near-term catalysts with the potential to improve underlying steel fundamentals for 2025. A few leading indicators we monitor have started to trend higher and further easing of monetary policy could spur increased construction activity as we get into next year,” Topalian said. “And while we recognize that new infrastructure spending has been less deal-intensive than originally expected, we do still expect to generate incremental demand in the years ahead.”

Fort Wayne, Indiana-based Steel Dynamics Inc. said it’s prepared for 2025.

“Based on domestic steel demand fundamentals, we are constructive regarding the outlook for 2025 metal market dynamics,” SDI Co-founder, Chairman, and CEO Mark Millett said.

SDI is one of the largest metals recyclers in North America and owns several Omni recycling operations.

“We expect steel pricing to recover with an anticipated lower domestic interest rate environment, coupled with continuing onshoring of manufacturing businesses, and the expectation of significant fixed-asset investment,” Millet said, noting government programs including U.S. infrastructure spending, the Inflation Reduction Act (IRA), and Energy Department initiatives.

Steel Market Update noted that SDI’s bullish outlook for 2025 also comes thanks to a sprawling trade petition against imports of coated flat-rolled steel.

Aluminum supplier Constellium SE, meanwhile, is more uncertain heading into next year.

“We continue to face uncertainties on the macroeconomic and geopolitical fronts, and we have a demand environment that has continued to weaken throughout the year, which accelerated during the third quarter and has now spread to most of our end markets,” said CEO Jean-Marc Germain.

“Given the softness we are experiencing today across most of our end markets with no signs of recovery in the near-term, we are also more cautious as we head into 2025,” Germain said.