Here's something to think about,
|Domestic and foreign issues keep scrap prices low|
|By John Ambrosia - Trend Analysis - April 20, 2015|
|Along with April’s mostly sideways markets came another dose of reality for sellers in the ferrous scrap market: Prices are unlikely to rebound strongly anytime soon.“I can’t see an argument for either direction,” one Midwest dealer said. “On the one hand, I don’t see any factors improving sufficiently to drive pricing up. But on the other, I also can’t see any justification for prices to be pushed down anymore. We may be enterting a period of stability, although one where we continue to get hammered due to the low level we’ve been running at.”The two biggest factors continuing to create the suppressed situation are basic supply-and-demand issues – mill capacity utilization rates are low, as is foreign need for ferrous scrap. These two have combined to make a huge divot in 2015 scrap values so far.|
The weekly U.S. mill production capacity rate continues to be historically low. In early March, for the first time in nearly two-and-a-half years, it fell below 70 percent and has not moved over that mark for eight weeks now.
At the same time, exports also remain suppressed. U.S. ferrous scrap exports dropped in February to their second-lowest levels in five years. Ferrous scrap exports totaled 984,739 tonnes, down 5.5 percent from more than 1.04 million tonnes in January and 17.8 percent below nearly 1.2 million tonnes shipped abroad in February 2014, the latest U.S. Commerce Department data show.
|Export declines continue to affect scrap market|
|By Bill Beck - Trend Analysis - March 23, 2015|
|Ferrous scrap exports – specifically the lack of them – continue to have an impact on the North American scrap market.In January, ferrous scrap exports were an anemic 1 million tonnes, the lowest total since last January and on track for a 12-million-tonne year.In 2014, the U.S. exported 15.3 million tonnes of ferrous scrap, the lowest annual tonnage since the down years of 2008-2009. Since topping out at a record 24 million tonnes in 2011, exports have dropped an average of 3 million tonnes a year.|
For 2015, that means 9 million tonnes that had flowed overseas in 2011 are now searching for a home in the U.S. market.
At a time when demand at U.S. mills is drying up, that additional 9 million tonnes is a further drag on domestic ferrous scrap prices.
The solution to the malaise that is affecting U.S. scrap exports is a weakened U.S. dollar. But that's unlikely to happen anytime soon. With the Chinese economy showing signs of a dramatic slowdown, and the European Union struggling to jumpstart the EuroZone economy, the U.S. dollar is likely to remain strong for some time to come.
And that means millions of tonnes of ferrous scrap that would have gone to make steel overseas will remain in this country.
So when the seller says you can get some scrap guy to haul it away for free,,,,think again LMAO
We were one of 5 offers on a mixed use commercial with an old machine shop occupying the warehouse.
We knew the heir was in New Mexico & just wanted out. Everyone else went in requesting a cleanup. We went in cash, close in 30, 'as is'.
It became one of the most lucrative deals I did & the guy we leased it to was glad to dispose of the scrap & keep the tools & equipment.
Mine was a mobile home park.
The city said to bulldoze everything down.
I negotiated with the bank, the city and my scrap hauler. Bank wanted it off the books. City gave me 30 days to show a major improvement, and 6 months for rehabs.
Scrap guy offered me a third, him a third and his buddy a third. I sweetened the deal . him 1/2 , his buddy 1/2 and I get it done in 30 days.
That park is the most profitable property I own. Citys happy and banks happy.
Yeah well keep in mind, scrap prices are in the toilet.
A few years, back I was getting numbers like $350 @ gross ton for loads of #1 heavy melt. Now we are down to like $150 in the Philadelphia market. Prepared and delivered to local mills is only at about $230
What at one time I could pay for, I've now got to charge to take away.
Billy Bob and his drinking buddy in their pickup truck may or may not know this, but when the first load hits the scale, they are going to get educated in a hurry. Then they are going to bail on the job.
I noticed the prices fell a bit too. I just scrap random copper and aluminum from jobs but I was thinking about stock piling for a bit. I really don't understand how billy bob and his drinking buddy can afford to drive around all day in their pickup full of steel and make any money it's comical.
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