High tide - Ferrous - Scrap prices - Brief Article

Recycling Today, Feb, 2003

It is not often that the scrap market gets coverage from the wider business press, but recent price increases have caught the attention of the Reuters news service.

Export demand is cited as the key reason for prices in the $144 per ton range reported in eastern U.S. port cities.

Buyers from East Asia, Turkey and other parts of the world are driving up prices on both coasts and, ultimately, throughout the U.S. According to the Reuters report, January pricing rocketed up as much as $20 since December, causing buyers to pay more than they have since 1999.

Dealers report that orders for export shipments are in volumes that cannot be filled until spring.

The boosted pricing is eating into the margins of steelmakers and domestic scrap buyers, just as many of them finally began reporting black ink for their recently completed quarters.

The Reuters report notes that several steelmakers are adding surchages to finished products to protect their margins.

While the pricing is encouraging for scrap dealers, many wish they had the material flow to take full advantage of the market. "I think most yards are struggling on the flow," one Ohio scrap dealer remarks.

Area factories just "aren't stamping material out," he adds.

No. 1 Heavy Melt Composite Pricing

(Per gross ton, monthly average)

December 2001     $65.00
January 2002      $69.97
February          $76.58
March             $82.09
April             $92.03
May              $101.53
June             $101.60
July             $101.67
August           $101.67
September        $103.62
October          $103.12
November          $97.25
December          $97.00

Source: American Metal Market