Foreign scrap buyers see opportunity in US mill end-of-year purchasing patterns

Jan 01, 2010 | 07:46 AM | Michael Marley

The domestic steel industry's scrap buying practices have become as predictable as a rainstorm on an overcast day. Take, for example, the steel industry's decision to buy little or no scrap in December.

Mill buyers complain that company accountants call the plays in December. Even if they could score a touchdown by buying scrap at a bargain price, the bean counters whistle the play dead before it even gets started. The rationale is simple: Finance managers don't want to spend cash or to carry excess inventory on the company's books at year-end.

This has been the case for decades, not just a few years, so ferrous scrap processors are well aware of the practice and have learned to live with it. Some cut their purchases of peddler and obsolete scrap before December arrives. Others simply hold onto what comes through the gates, knowing that they are unlikely to sell much of it to mills in December and are prepared to wait until January or February. A few may even pray for a heavy snowfall, which seems to prod mills into buying scrap regardless of the price or inventory on hand.....