Ferrous

Demand is strong for ferrous scrap, but supply is running just short enough that many shippers are running into trouble honoring their commitments to supply domestic mills.

On the one hand, the situation brings with it the positive aspects of guaranteed demand and strong pricing. Unfortunately, it has also tempted dealers into accepting orders they may not be able to fill.

"With prices this high dealers want to take 21 orders, even though they know it will take them five weeks to fill 20," says one Midwestern scrap processor. "It puts us all behind," he admits.

The situation has been hectic in recent months even without a great deal of demand from offshore, he says. "Demand is just a little bit greater than supply, and that’s without much of en export market," he says. "If everything stays the way it is—or if China or Turkey or Korea starts buying—then summer pricing will stay firm at the very least."

A scrap recycler in the Northeast has the same outlook. "Mills are trying to talk this market down, but pig iron pricing is up if it’s even available, so that takes an option away from them," he remarks. "When there is so much talk among brokers and traders trying to talk the market down, you figure they are afraid of the market going up too much."

Fortunately for recyclers, enough supply is coming in to fill most orders, even if on a delayed basis. "We actually had some inventory build because we had strong flow all winter," says the Northeast recycler. "Now we’re getting slammed with a spring rush of orders," he adds.

High scale prices for nonferrous scrap are helping to keep scrap flows healthy. "The nonferrous prices are bringing in a steady flow, and a lot of these folks load a little sheet iron onto their trucks as well," says a recycler in the Great Lakes region.

An East Coast recycler remarks, "With nonferrous prices so high, [peddlers] are able to go further out and further out and are getting stuff that is rusty or, in some cases, they find things that someone would probably love to restore."

Whereas two years ago many recyclers were worried that the peddler trade was a thing of the past, the East Coast recycler notes, "It’s amazing how many new people have entered the world of recycling."

(Additional news about ferrous scrap markets, including breaking news and consuming industry reports, is available at www.RecyclingToday.com.)

MITTAL UPS BID FOR ARCELOR

Mittal Steel Co. has increased the per-share price it is offering for European steelmaker Arcelor, and as of late May the business press viewed the deal as likelier to happen.

According to a Bloomberg News report, Arcelor’s board of directors was considering the most recent proposal while meeting in Luxembourg. The board also reportedly asked Mittal Steel to see a business plan, indicating a greater level of interest than what was demonstrated when Arcelor outright rejected the first bid in late January.

In the second offer, Mittal Steel and its chairman Lakshmi Mittal increased the offer by some 34 percent. Mittal Steel is hoping to either sway Arecelor CEO Guy Dolle, who has reacted negatively to the deal, or to persuade the board and shareholders to overrule Dolle.

Should the deal occur, the newly combined company would be an estimated three-times larger than any of its global rivals, according to Bloomberg News.

In addition to Dolle, objections to the deal have also come from some European elected officials, particularly in Luxembourg, where Arcelor is based, and in France, where the company has many steelmaking facilities.