The right direction - Ferrous - ferrous scrap prices - Brief Article

Recycling Today, June, 2002

Prices paid for ferrous scrap continue to move up, following along with higher prices being paid for many types of finished steel.

Steel prices have been rising steadily since the Bush Administration announced its Section 201 protection measures. The measures may be taking effect at the same time domestic demand for steel is increasing, helping to fuel the steady price increases for sheet steel and other types of steel.

Whatever the causes, steel mill capacity rates are up, fueling the first bit of competitive bidding for ferrous scrap that many dealers have seen for a long time. Published American Metal Market pricing indicated a $10 per ton boost in April. Dealers call that an accurate figure, and say they have not seen prices moving backward in May at all.

The frustrating part for some processors is finding enough scrap to sell at the rising price. "You'll have to see almost a doubling of the price on the scale before you see a significant rise in what's coming in," says one Texas processor of obsolete scrap supplies.

The availability of industrial scrap remains a regional variable, with dealers in some parts of the country worried that the decline in their metro areas may be permanent if some manufacturing plants remain in mothballs.

In May, the weather also provided a barrier to scrap collection at salvage yards in some parts of the country, most notably the Midwest. "We've had major floods, and it's still very muddy and hard for scrap to move," says one Missouri processor.

Pricing

No. 1 Heavy Melt Composite Pricing

(Per gross ton, monthly average)

April 2001           $77.90
May                  $76.67
June                 $78.62
July                 $79.81
August               $80.00
September            $80.00
October              $73.29
November             $64.97
December             $65.00

January 2002         $69.97
February             $76.58
March                $82.09
April                $92.03

Source: American Metal Market