Ferrous Supplement -- Welcome

Gold is for the mistress,

     Silver for the maid,

Even at its depths, ferrous stands on top

Copper for the craftsman,

     cunning at his trade.

“Good!,” said the baron,

     sitting in his hall,

“But iron, cold iron,

     is master of them all!”

—Rudyard Kipling,

“Cold Iron”

Industry veterans are searching deep within their memories to recall a more difficult ferrous scrap market than the one of late 1998. Yet even during a tough steel and scrap market, mountains of ferrous scrap continued to move through North America’s industrial production stream.

For those in the scrap industry, iron is most assuredly master of them all in terms of volume. Just as importantly, it seems to hold the most prominent position as a means of establishing the overall mood and outlook of the scrap industry.

 When prices for No. 1 heavy melt bundles are heading upward, scrap processors wake up ready to tackle the day’s challenges safe in the knowledge that they are dealing in a valued commodity. When the prices for those same bundles start falling, however, doubts and concerns swirl rapidly within the minds of many in the scrap industry.

Scrap recyclers can at least take heart that they are not the only ones wrapped up in the mysterious price movements of their most heavily traded commodity. Federal Reserve chairman Alan Greenspan—often called the second most powerful man in Washington—reportedly pays close attention to the same ferrous scrap pricing numbers. He sees demand for scrap steel as an important (and leading) indicator of the health of the manufacturing sector of the U.S. economy.

Certainly, we at Recycling Today also recognize the importance of the ferrous scrap industry. For the second consecutive year, we are leading off our Secondary Commodity Insert series with a look at ferrous scrap.

On the following pages you’ll find articles covering several aspects of the industry, including ferrous scrap flow patterns (and a reprinting of our popular Scrap Flow Map), the status of automotive shredding, an update on scrap substitute developments, and the state of ferrous scrap’s primary consumer: the North American steel industry.

So here’s to ferrous scrap, the “master of them all.”