Ferrous

MOVING THROUGH

Ferrous scrap processors remain pleased with pricing that appears to be holding steady through the summer, although in some regions more generated material would be welcome.

Shredder operators have welcomed the return of auto bodies to their facilities for the past few months, as dismantlers have found prices attractive enough to bring in auto hulk inventories that had been building up in their yards.

The amount of shred on the market reached the point in July where prices started back down in most regions. Now processors are anxious to see whether the flow of auto bodies will continue or if most of the pent up inventory has been brought to the market.

The return of better pricing has helped obsolete scrap flow into yards in higher volumes in most regions. "We’re busy—I’ve been as busy as I’ve ever been," says one eastern U.S. processor, who also notes that, "There is a lot of shred out there."

Industrial scrap has been in shorter supply. "We have shortages of certain grades, such as clips and busheling, because production is down," says the eastern processor.

A ferrous buyer in the South also says generation from industrial sources has been inconsistent. "Production in plants has dropped and spiked—it hasn’t been consistent. I don’t think the manufacturing economy has completely rebounded or turned the corner to a good productive level."

Still, with mills paying $100 per ton and also charging more for their steel products, most ferrous dealers are far more optimistic than they were earlier this year. "If prices stay so steel mills can make some money, that’ll be good," says the eastern processor. "I wouldn’t mind another $10 or $15 per ton, but it’s just good to see the mills up and running and buying again."

News on the broader economic front is mixed, although figures released by the American Iron and Steel Institute for the last week of July showed steel production in the U.S. moving upward, pushing the capacity utilization rate above 90 percent. Scrap dealers will be anxious to see whether or not this reflects a bounce back from reported slower overall economic growth in the U.S. recorded in the second quarter of 2002.