The three-month downward trend in ferrous scrap pricing reversed sharply in July, as prices for all grades of ferrous scrap zoomed back up in the summer months.
Observers seem to agree that global demand for scrap iron has remained strong even as the traditional summer downtime hit North America and Western Europe, including the annual model changeover hiatus in the automotive industry.
As of August, “there is more scrap available than there was earlier this summer,” according to one ferrous scrap recycler based in the Great Lakes region. “We’re getting more cut grades from demolition contractors, and I think industrial generation has picked up.”
In his part of the country, a spell of dry weather has also helped auto dismantlers and their customers salvage more vehicles from rural areas. “They’re getting the cars out now while it’s dry and while they know scale prices are good,” the recycler remarks.
But the increase in scrap supply could also mean that the price spike will be short-lived. “Even if the consumer demand remains good, this increased supply should put a brake on pricing,” he notes.
Nonetheless, scrap recyclers and their consumers can take comfort in a historically good market, he comments. “Even if the market goes back down by $50 or $60, this is still the kind of market that will be talked about for the next 20 years or so.”
After reaching a peak of some $250 per ton this March, steel scrap prices began easing back for the next few months. But that trend reversed sharply in July, according to figures calculated by American Metal Market. That publication’s price trackers gauged a $50 per ton price increase in July, with prices averaging $215 for the month.
Based on recent earnings reports, the steel industry has also managed to find profit margins, offsetting their higher raw materials costs with surcharges passed on to customers. “Demand is good for finished steel and for our scrap. It sure looks like the surcharges are more than covering their costs,” says the recycler.
Prices for aluminum, copper and brass scrap have remained steady into the summer and early fall as well.