Ferrous

Steel Imports Surge Through the Fall

Countries continue to export their economic woes to the United States resulting in an unprecedented amount of steel being dumped in the U.S. market, according to the American Iron and Steel Institute (AISI). The resulting cutbacks in North American steel production should continue to make the ferrous scrap market a difficult one.

U.S. imports of steel mill products set a new record high of 4.4 million net tons up 78% from the 2.5 million net tons imported in August 1997. The year-end import total could match 50% of expected total U.S steel shipments by the entire domestic industry.

April through August 1998 were the five highest individual monthly totals for steel imports in the history of this country. Imports are up 29.1% from Russia; up 141.4 % from Japan; up 95.6% from Korea; up 387% from Indonesia; up 159.6% from Australia; up 124.3% from South Africa; up 71.6% from India; and up 68.1% from Ukraine.

A Note of Optimism

Although few would be willing to put themselves on the line and predict an imminent recovery of the worldwide ferrous scrap markets, there may be light at the end of the tunnel, according to speakers at the fall meeting of the Bureau of International Recycling (BIR) in Brussels, Belgium.

Mitchell W. Padnos, Louis Padnos Iron & Metal Co., Holland, Mich., noted at the late October meeting that "the export market could be one of the positive signs we see." He added, "scrap prices have risen both in Taiwan and Korea. Mills in both countries have a decent demand for cargoes to be shipped between now and December. And with this demand, we have seen higher prices bid and paid for cargoes since scrap supplies are low with poor flow into dealer yards."

John Crabb, SimsMetal, Ltd., Australia, said "although scrap consumption in Asia is down significantly, in some regions there are pockets of consistent demand, which should continue in the months ahead. He noted, "there is evidence that the Asian market may have found a floor as very recent sales have shown a marginal improvement in price."

With respect to the U.S. market Crabb said, "there is a view U.S. scrap inventories could be in balance by the end of the year. If this is the case, providing there are no further cuts in domestic steel production in the U.S. and Europe, there is some justification in thinking that we may see further strengthening in Asian prices early in the New Year."