Something more than seasonal softness?

Domestic nonferrous scrap demand remains soft, sources say, though it’s hard to know how much of it is seasonal and how much is because of high interest rates and a sluggish economy.

“There’s pretty soft domestic demand for really everything, especially stainless and nickel,” an executive with a scrap metal processing company based in Ohio says, adding that spreads and appointments for deliveries are widening.

“No one wants to call it a recession—maybe it is and maybe it isn’t—but order books for consumers and mills have slowed,” he says.

Despite slowed demand from mills and manufacturers, industrial scrap still flows into his company’s yards.

“No one wants to call it a recession—maybe it is and maybe it isn’t—but order books for consumers and mills have slowed.” – an executive with a scrap processing firm based in Ohio

Another executive with a scrap processing company based in the Midwest that handles wire and cable says domestic generation briefly slowed earlier this summer. “Scrap is being generated, but it is very competitive to purchase at the moment.”

Construction and infrastructure work is generating scrap, he adds, as are weather events that have led to demolition work and retail scrap sales as homeowners clean up.

Demand has dropped significantly, though.

“Clearly, there is not the need for the materials quite like there was six to 12 months ago,” the contact in the Midwest says. “The second half of the year is not looking much brighter. I think consumers will continue with weak demand until the end of this year. Interesting scenarios when you have a lot of scrap but nowhere to take your finished product, but these are the cycles we go through.”

The contact based in Ohio says he would expect aluminum scrap demand to pick up in August normally, but he’s unsure that will happen, adding that selling aluminum scrap in the spot market has been difficult for six months. Red metals demand has held up somewhat better, he says.

Despite talk of a copper shortage, the Ohio-based contact says he’s not seeing much demand for copper products domestically. Therefore, his company is selling its red metal scrap to the export market out of necessity.

“I think export has slowed a bit as well,” the contact in the Midwest says. “Not to say you cannot find a sale, but you may not love the price.”

Both contacts indicate transportation availability has eased and pricing has improved in some lanes.

The contact based in the Midwest says it’s helpful when quoting scrap to know he has a less-expensive rate and may not have to worry quite as much about the driver showing up. “Having reliable freight is helpful because we make money dealing scrap, not rearranging appointments and pickup dates.”

In ocean shipping, the Ohio executive says he’s seen reductions in time on the water and rates, making exporting more competitive than trucking material to consumers in some parts of the U.S.