Nonferrous

While there are indicators that ferrous may have hit a bottom, several preliminary indicators show that pricing for finished stainless steel may be in the early stages of weakening.

One handler of stainless steel in the Eastern United States says that he sees the beginning of a weakening in the stainless market. However, he cautions, "It isn’t dramatic as of yet."

The biggest problem is the imbalance between supply and demand at the present time.

Signs of the decline in stainless steel scrap were not limited to the United States, as reports from Spain and the United Kingdom indicate that stainless steel had seen a sharp decline in price during the first half of July.

While many people expect to see some downturn in the stainless market, most concede that the decline will be somewhat shallow and short lived. As one Midwestern processor notes, "Stainless just got ahead of itself a little bit."

While stainless may be showing signs of struggle, copper remains strong. Prices have people "whistling past the graveyard," as more people expect to see a retrenchment in pricing for copper scrap.

Recent signals indicate that a stronger dollar could put downward pressure on copper scrap.

While a stronger U.S. dollar could work to push down copper prices, a continued strike in North America is creating some concern about a potential shortage of copper on the market. Several mines and a refinery continue to strike, creating some concern that, as China purchases more copper, a market shortage could develop. Adding to the overall uncertainty, some metals analysts say the strike and labor unrest, which has been limited to the Southwestern United States, could spread to Mexico.

While these labor problems have lead to some concerns about supply in the short term, several of the largest copper producers are looking to increase their capacity. This will likely help to meet demands from world markets.

In the Bureau of International Recycling’s recent market outlook, a host of representatives from Europe and Asia cast an upbeat outlook for copper. The expectation that China will remain a large presence in the market continues to drive copper markets. One representative noted that China might import more than 4.5 million metric tons of copper this year.

India, the world’s largest democracy, appears to be following the path laid out by China in that it is boosting its overall intake of scrap and prime metals. These countries’ growing economies are helping keep copper prices higher.

Supply and demand in the nickel market remain in balance, with some financial houses playing a larger role.

While the nonferrous metals markets continue to show an overall positive outlook, as of the tail end of the summer, the overall market is quiet as many European companies take long vacations, reducing overall business to China.

(Additional news about nonferrous scrap, including breaking news and consuming industry reports, is available online at www.RecyclingToday.com.)