Relax, the US is blessed with a bottomless well of scrap

Sep 16, 2008 | 05:55 AM |

Just how deep is the U.S. ferrous scrap reservoir? Truth is, no one knows with any certainty how deep.

A study by consultancy Robert R. Nathan Associates Inc. in the late 1970s said, in brief, that there were millions and millions of tons of iron and steel scrap out there. Not to worry.

The study was done a year or so after the now-deceased Father William T. Hogan, an economics professor and steel industry analyst, had issued his own report predicting a severe ferrous scrap shortage in the 1980s. Too bad Hogan didn't live long enough to see the current ferrous scrap market—it might have reassured him of his earlier prediction. But at the same time, it might have undermined it.

In the first half of the past century, purchased ferrous scrap was a commodity that steelmakers used at will. If the price was cheap enough, they tossed it into their open-hearth furnaces with their home scrap and iron. Electric and cupola furnaces, which use mainly scrap, were the realm of specialty steelmakers and foundries. When basic oxygen furnaces (BOFs) became the operating standard for carbon steelmaking in the 1950s and 1960s, obsolete ferrous scrap got short shrift. The BOF shops wanted the auto bundles and heavier demolition scrap like plate and structural beams.....