Ferrous Department

The Right Direction

Prices paid for ferrous scrap continue to move up, following along with higher prices being paid for many types of finished steel.

Steel prices have been rising steadily since the Bush Administration announced its Section 201 protection measures. The measures may be taking effect at the same time domestic demand for steel is increasing, helping to fuel the steady price increases for sheet steel and other types of steel.

Whatever the causes, steel mill capacity rates are up, fueling the first bit of competitive bidding for ferrous scrap that many dealers have seen for a long time. Published American Metal Market pricing indicated a $10 per ton boost in April. Dealers call that an accurate figure, and say they have not seen prices moving backward in May at all.

The frustrating part for some processors is finding enough scrap to sell at the rising price. "You’ll have to see almost a doubling of the price on the scale before you see a significant rise in what’s coming in," says one Texas processor of obsolete scrap supplies.

The availability of industrial scrap remains a regional variable, with dealers in some parts of the country worried that the decline in their metro areas may be permanent if some manufacturing plants remain in mothballs.

In May, the weather also provided a barrier to scrap collection at salvage yards in some parts of the country, most notably the Midwest. "We’ve had major floods, and it’s still very muddy and hard for scrap to move," says one Missouri processor.

GALAMBA GROUP ADDS LOCATIONS

The Galamba Group of Companies, Kansas City, Mo., has purchased the assets of Massey & Son Recycling Inc., with locations in Topeka and Emmett, Kan. The two yards, which contain processing equipment such as balers, portable shears and car crushers, will supply shredder feedstock to the Kaw River Recycling unit operated by the Galamba Group in Topeka, according to Galamba Group president and CEO Raynard Brown.

Both locations will remain open to feed the shredder at the Kaw River facility, says Brown.

The Galamba Group of Companies includes ferrous and nonferrous scrap processing facilities operating in Missouri and Kansas under the names Galamet, National Compressed Steel and Kaw River Recycling.

OTHER NATIONS ERECTING STEEL BARRIERS

Reactions from other nations to the Bush Administration’s Section 201 trade measures protecting American steelmakers are beginning to take shape. Japan has said it will notify the World Trade Organization (WTO) that it will impose 100 percent tariffs on certain types of steel and steel products made in the U.S. The European Union has also notified the WTO of its plans to levy 100 percent tariffs on certain U.S. goods, including non-steel-related items such as fruit and textiles. Other nations, including Brazil, China and South Africa, have also protested the Section 201 measures. Russian ministers, meanwhile, are vowing to be “tougher on imports” while also restructuring their nation’s steel industry. The import-related comment struck some observers as curious, since Russia currently exports more than three-quarters of the steel it produces domestically. The tariff plans by Japan are being called, “a necessary step to retain our right to rebalancing measures,” by Vice Trade Minister Katsusada Hirose, as reported by Reuters. According to the Reuters report, representatives from the U.S. and Japan are continuing to negotiate to prevent an escalation of tariffs by both nations. Japan will reportedly ask the WTO to set up a dispute settlement panel between the two nations if no headway is made on the issue.