Ferrous Department

Slowly It Turns

It is most likely a slow climb back, but some ferrous scrap dealers are reporting signs that prices paid by mills are inching their way back up.

One processor in the Southwest has seen a three to four dollars per ton increase across several grades during the summer. "Prices around here are up about eight dollars over two months ago," he remarks, adding, "all grades are up about the same."

The scrap dealer believes ferrous prices will rise "an average of four or five dollars through the end of the year." His theory is that inventory adjustments the mills made to meet slower production schedules have been completed. And just as mills stabilize their scrap orders, dealers will have shorter supplies of some grades.

"Traffic across the scale is slow; I think that is universal," he notes. "Contractor flow is slow, demolition is down; peddlers are off, new production scrap—it’s all off, which I think is going to create a stronger scrap market. Mills have ratcheted [inventory] down too much. The only way to make up for that is to get peddlers more active, and that’s going to take higher prices."

A few states away in the Southeast, however, another shredder operator says that prices have inched up only by the couple of dollars reflected in published pricing lists. "I can’t say things have improved all that much," he notes.

A Midwest scrap dealer hopes a reduction in generated busheling and other industrial grades could help prices. "The steel slitting lines are down and there are a lot of vacation schedules being run, so the industrial grades are getting harder to come by," he remarks.