Maintaining strength

Nonferrous scrap continues to flow throughout many regions of the U.S. and at prices that generally have pleased nonferrous scrap processors and brokers.

“Scrap generation so far this year seems to be strong,” a broker based in the Southeast says. “With a very easy winter for most of the country, most yards are reporting very good scrap flow.”

The broker also attributes the healthy flow of nonferrous scrap to better ferrous scrap prices relative to early April of 2016. “Steel prices have been a driving force for the flow of nonferrous scrap metal in scrap yards.”

A processor based in the Northeast who deals heavily in copper scrap describes generation as “pretty good.” He adds, “When we see a jump in the terminal market, there is metal available.”

Regarding domestic demand, he says, “Consumers are in general pretty quiet coming out of [the first quarter]. Most grades of No. 1 copper are readily available. There seems to be a little tightness of No. 2 copper.”

The Northeast-based scrap processor characterizes supply and demand as being “fairly evenly matched,” adding that demand is at “lower volume levels than we would like to see.”

A scrap processor based in the Southeast says his company is coming off a notable first quarter. “We probably had the best first quarter that we have had in years—maybe since 2006-2007.”

Material flow across the company’s network is “the best that we have seen in years,” he adds.

While he says mills’ appetites have been good and his company has been able to move metal easily, aluminum scrap is stronger than red metals scrap as of the start of the second quarter.

“We probably had the best first quarter that we have had in years—maybe since 2006-2007. – a nonferrous scrap processor based in the Southeast

The broker based in the Southeast says, as of early April, there is “still plenty of scrap flow and plenty of demand” within the domestic market. “There just have been a few hang ups, with many of the consumers changing their production lines (some consumers are adding capacity) and changes in consumers’ scrap flavors.”

He adds that the strongest demand is coming from secondary markets within the U.S. “With the recent strong push in 380 [aluminum] spec prices, the secondaries have room to push their scrap prices up. Many of the mills and extruders bought their 2017 needs on yearly formulas and the need for spot business has been limited,” he adds.

The processor based in the Southeast says he thinks spring and summer will see some blips in flow and pricing as domestic consuming facilities take outages, which he adds is typical. “If flow continues to be good, we will see a widening of spreads and appointments being limited.”

Material flow in certain areas of the U.S. could be affected by the start of produce season in the Southeast, sources say.

“Our company’s on-time percentage of pickups has been in the low to mid-90s for quite some time,” the broker says. “We expect changes to start shortly in the Southeast and work its way to the Midwest with produce season upon us here in Florida.”

The processor in the Southeast also references produce season, saying, “Generally from mid-April to July, we have more transportation issues as the Florida produce comes in. It’s difficult to depend on trucks.”