Supply line - Nonferrous - Some scrap supplies are hard to find

Recycling Today, Feb, 2003

Prices for most nonferrous commodities are stable and, in some cases, rising, but that hasn't made life easier for everyone in the secondary metals business.

Scrap supplies can still be hard to find for many grades of aluminum, copper and other metals, and margins remain thin for secondary smelter operators and ingot makers.

"Everything is hard to come by right now," says one Midwestern scrap dealer. "There's no question, it's been quiet," he says of scrap generation.

A scrap recycler in the Great Lakes region says demand for aluminium remains strong, which is good for dealers, but erodes profit margins for secondary producers. "A lot of players are vying for the same product. I think we get 12 calls per day for the same aluminium dross," he remarks.

A West Coast consumer confirms the situation, though adding that demand for secondary ingots and alloys has also recently slowed down. Even so it can be hard to find scrap to meet melting needs.

A boost in metals prices, some observers point out, is contingent upon economic recovery. Although primary oversupply may be putting a lid on price boosts for commodities such as copper, if the ongoing overseas demand is coupled with a revival of U.S. industrial output, the nonferrous pricing scene could change dramatically.

Average U.S. Refiners Buying Prices for No. 2 Copper Scrap

(cents per pounds)

December 2001    54.50
January 2002     55.40
February         57.34
March            59.64
April            58.80
May              60.39
June             63.95
July             60.59
August           55.48
September        55.68
October          56.70
November         60.50
December         61.33

Source: American Metal Market