2004 Scrap Metals Supplement -- Welcome

Shaking Off the Rust

When our office took delivery of a new postage-metering machine, there were probably several worthwhile differences to note about the new machine compared to its predecessor.

For someone thinking about basic materials consumption, however, the most noticeable thing was that virtually every visible component of this machine seemed to be made from plastic. From the scale to the display panel and everything in between, molded plastics seem to have won the day.

Observations such as this can make one look at the future of the metals sector with a sense of gloom. But those who trade in, speculate on and produce the materials have headed into 2004 with anything but gloom.

As the year starts, steelmakers are raising their prices for many forms of steel, passing on higher prices they are paying to ferrous scrap dealers enjoying a high dollars-per-ton operating climate.

Similarly, producers of aluminum and copper are charging more for their commodities in a market where supply is not keeping up with demand.

Despite all the plastic postage meters and other small appliances, the demand for metals has not collapsed. Rapidly industrializing nations in particular (with China leading the way) are consuming metals voraciously as they build heavy-duty infrastructures, using metals in applications where plastics don’t compete.

In the short-term, the metals markets have shaken off the rust that was once all too visible. But the plastic postage machine may still have a lesson to teach.

The age of humankind when metallurgy was a leading source of advancement and innovation has passed, many would argue. The last two decades have been marked by repeated success stories for the plastics industry as it eats into product, component and packaging segments once held by the metals industry.

If 2004 brings profits to metals makers, recent history has shown it is not likely to be a lasting circumstance. Metals companies will have to invest the profits wisely and be ready to compete for a presence in every grocery store aisle, auto assembly plant and small appliance spec sheet where materials market share is up for bid.