FULL OF SCRAP Please don’t shoot the piano player—it’s not his fault

Mar 01, 2008 | 01:12 PM |

In times like these, when ferrous scrap prices have leaped as high as they did in January, I feel like a piano player in a saloon in the wild and woolly American West. The cowboys have come to town and sold their steers. Their next stop is usually the saloon, where they drink to their success, tell the piano player to play some happy music and dance with the bar girls. It's time to celebrate.

Some of the patrons might not like those tunes. But a piano is too expensive to replace, so shoot the piano player. He's unarmed. Sure, I'm the guy making the noise by reporting the steep increases in the price of bundles and shredded scrap, but I only play what I hear from the scrap market. I don't compose it. The mill buyers, their brokers and the dealers are the composers. I simply wait until they've finished each month's piece, then I play it back for them and others in the metals industry and its markets.

January saw prices climb by as much as $90 a long ton in some regions. Such obsolete grades as No. 1 heavy melt and shredded scrap soared to record highs. No. 1 heavy melting steel rose to $345 a ton while shredded scrap prices averaged $395 a ton and even topped $400 a ton in so-called quiet deals, or purchases of material from more-distant suppliers. Strong export demand and low inventories at mills were seen as the culprits. Some mills were short scrap and had little choice but to buy at the prices that dealers were asking.....