Ferrous

A dizzying variety of factors are combining to make for a speculation-filled autumn for the ferrous scrap market.

A market of historically high scrap prices has steelmakers scrambling to figure out how to best maintain their margins. Some steelmakers have been responding to higher summer scrap prices by aggressively seeking out lower-cost grades, trying to play the spot market in their favor.

Mill buyers in the northern United States and in Canada are faced with the additional task of preparing to build stockpiles to last through the winter, while mills in the southern United States may soon tap into storm cleanup debris resulting from hurricane season.

The dictum that the economy will keep growing in an election year has appeared to hold true, with domestic mills joining overseas mills in running at healthy capacity rates.

The Chinese government has taken steps to slow down its economic growth and has also caused scrap exporters to maneuver through a new customs registration process, but Chinese mills are nonetheless producing significant amounts of steel.

An overriding concern for ferrous scrap recyclers and consumers is ensuring there is enough scrap to go around.

Demolition scrap provides one supply pipeline, and at least one steelmaker is tapping into its own cut grades. In Cleveland, ISG has been dismantling an old blast furnace building and feeding the structural scrap directly to its nearby still-functioning furnaces.