Not so obsolete - Ferrous

Recycling Today, Dec, 2003

The hunger of consuming steel mills and foundries to obtain ferrous scrap has made obsolete scrap far from obsolete in the minds of most in the supply chain.

While the term has always been somewhat of an oxymoron, the current hunger for ferrous shred has made it abundantly clear that there is a ready market for the old cars and appliances of Americans.

Scrap processors remain in a situation where drawing out obsolete scrap is critical to their operations. With the U.S. manufacturing sector in a slump for the past several quarters, the amount of industrial scrap generated has been woefully deficient to fill the strong demand from East Asia in particular.

Additionally, shredded scrap continues to find favor among furnace and foundry operators throughout the world as a preferred grade of ferrous scrap.

Consequently, shredder yards in many parts of the country are running at capacity or beyond, provided their metro areas are generating enough auto bodies, washers, dryers and refrigerators to keep production humming.

Defying the wishful thinking of mill buyers, prices paid for most ferrous grades continue to climb, helping to make the trip across the scrap yard scale worthwhile for peddlers bringing in white goods and other obsolete items.

Auto dismantlers also have little reason to hold onto their hulks, as prices continue to hold and even nudge upward with each passing month. American Metal Market composite pricing for the number one heavy melting grade completed its fourth straight month of upward movement in October.

However, veteran scrap dealers know that what goes up inevitably comes down, and they are watching the Chinese market particularly closely for any indications of a possible slowdown. But currently, scale houses are offering an attractive price to help bring in what can only be termed a hot commodity for now.

No. 1 Heavy Melt Composite Pricing

Oct 02   $103.12
Nov       $97.25
Dec       $97.00
Jan 03   $106.41
Feb      $115.91
Mar      $120.42
April    $119.80
May      $109.04
June     $106.13
July     $111.21
Aug      $123.32
Sept     $128.35
Oct      $130.67

Source: American Metal Market (per gross ton, monthly average)