Ferrous

Summer Slump

Baseball teams falling out of pennant contention aren’t the only entities experiencing a summer slump. For the second straight summer, ferrous scrap prices and steel mill melting rates are slumping in unison.

Scrap processors are once again in the position of hoping a trough in ferrous pricing has been reached and that better times lie ahead.

“I think the mills are going to start buying a little more,” says Jack Vexler of Monterey Iron & Metal, San Antonio. “I’m not overflowing with optimism, but I’m slightly encouraged that there will be a gradual improvement in the markets through February.”

A processor in the Southeast however, is not as convinced. “I don’t think it’s entirely seasonal; this is the time it should be picking up,” he remarks.

“The [industrial production] trend lines look down through the end of the year,” he adds regarding a recent forecast based on manufacturers’ production expectations.

American Iron and Steel Institute steel mill capability utilization figures mimic those from last year’s lackluster summer. An 80.9% rate for the week of Aug. 12, 2000 was down significantly from the 86.3% of the week before, but closely matched the 79.8% figure from the same time last year.

Vexler notes that the flow of incoming obsolete scrap has been surprisingly good considering prices, and the Southeastern processor agrees. “The flow coming in is good, but what we want to sell ferrous-wise is restricted,” he comments.