Ups and downs Scrap exports reach for the sky amid dollar’s fall

Dec 15, 2006 | 10:39 AM |

Ferrous and nonferrous scrap exports are at record levels these days and, unfortunately for some domestic scrap consumers, they could go even higher due to the weakness of the U.S. dollar against several foreign currencies.

The weakness of the U.S. dollar, particularly in relation to the euro and yen, makes U.S. scrap cheaper than material from its main rivals in western Europe and Japan.

Perhaps the most dramatic increase, and the one felt in the past few months, has been in ferrous scrap tonnage shipped to steel mills in Turkey, Egypt and elsewhere in the Mediterranean. Ferrous scrap shipments to Turkey through the first 10 months of this year were up 53 percent from a year earlier and have more than tripled from the same period in 2004. The same is true of U.S. ferrous scrap exports to Egypt and Greece.

The increased demand for U.S. material has been spurred by a decline of scrap available from Russia and Ukraine. In the past two years, western European exporters benefited most, largely because freight costs were lower from, say, Rotterdam than from New York. But that comparative advantage is being whittled away by the steady decline in the dollar. ....