Ferrous

SUMMER BALANCING ACT

Scrap recyclers are sensing a bit of a summer swoon setting in, but it may be an even-handed swoon among scrap generators, buyers and sellers that will ultimately have little impact on pricing.

A Texas recycler describes flow into his yard as "medium," with scrap coming in from farm cleanups, demolition and construction activity. Although these sources are reliable, they are not booming. "Demolition is tailing off a little," he observes.

Several states away in the northern Great Lakes region, another recycler sees a seasonal slowdown setting in both among generators and melters of ferrous scrap. "Industrial generation at job shops is slowing down a little bit, which is typical for this part of the year," he says.

In his market, "Obsolete and construction scrap seems to be flowing pretty fair; we’re not overwhelmed, but it’s not bad," the Great Lakes area recycler remarks.

There are more peddlers in both regions than there were before the resurgent market, both recyclers agree. "You’re seeing more of an interest," says the Northern recycler. "And the ferrous prices are good enough that someone will take some sheet metal scrap that they used to not want to take."

The Southern recycler also sees new faces among the peddlers, although he says that it remains an older man’s game and that he does not see that many young peddlers.

Although generation may be tepid, it could be matched by an easing of demand that will prevent prices from rising further this summer. The Southern recycler says the mills in his region have built up inventory, while the Northern recycler expects to see seasonal foundry closings and decreased activity at some electric arc furnace mills in his region.

Export demand is another variable that is tough to peg in advance, though the Southern recycler says he is hearing that added Mexican mill capacity could send buyers into the U.S. market for additional scrap.

Neither recycler forecasts a sudden pricing drop this summer, but one of them ventures to say it would almost be welcome news. "If the market dropped $100, I wouldn’t cry," he comments. "A lot of these new guys in the business would not figure their way out of it, while those of us who have been through this before would be able to see our way through and come through with fewer competitors."

(More news about ferrous scrap, including consuming industry reports, is available at www.RecyclingToday.com.)