Ferrous

Ferrous scrap prices have continued to head upward in the first quarter of 2003, owing largely to export orders from Asia.

Domestic buyers have upped their offers for ferrous grades as well, though in most cases a spread remains between what export brokers will pay and what domestic mills will pay.

The primary factor driving the demand increase—strong demand from Chinese buyers—is not expected to change at least for the rest of this calendar year.

Observers are concerned that higher scrap prices will put domestic steelmakers and foundries at a disadvantage as they were starting to get back on their feet after the Section 201 tariff.

Another concern is that mills will re-invigorate their research into scrap and iron alternatives.

Steel Dynamics Inc. (SDI), Fort Wayne, Ind., has announced its plan to restart its Iron Dynamics Inc. (IDI) scrap alternative operation in Butler, Ind., by the second half of this year.

Speaking at the Steel Scrap 101 Seminar hosted by ISRI in mid-February, SDI Vice President and General Manager, Flat Roll Division, Mark Millet acknowledged that the IDI venture "has given me my share of gray hairs."

But he noted then that the company had taken steps to "revitalize that technology," with the goal of being able to produce liquid pig iron at a cost of $150 per ton.

According to an SDI news release, the IDI facility, when fully operational, will be able to produce around 350,000 tons of liquid pig iron per year. SDI will consume the material produced, which will go toward complementing its use of ferrous scrap metal at the Butler mill.

"We were very pleased with the success of the Iron Dynamics’ production trials late last year using briquetting technology," says Keith Busse, Steel Dynamics’ president and CEO. "We believe the facility can be operated on a profitable basis. After a successful restart later this year, it should turn cash-positive in 2004."