Does the U.S. have an infinite supply of obsolete scrap?

Jun 01, 2010 | 04:26 AM | Michael Marley

In a previous column, I questioned whether all the easy-to-obtain obsolete scrap like No. 1 heavy melt and plate and structural scrap—the low-hanging fruit—had been picked, processed and sold to steel mills and foundries.

As often happens, a mysterious force called reality stepped in, slapped me in the face and said, "I'm gonna make you look foolish again."

Simply put, ferrous scrap seemed to flood into the market in May, driving down the prices paid by domestic mills. Some mill buyers and brokers like to argue that when spring weather arrives, old iron and steel scrap "comes out of the woodwork" or just materializes in farmers' fields. Perhaps it had been under the ground all winter and now has grown, ripened and is ready to be picked, much like corn or soybeans. Perhaps not.

What is true is that warmer weather stirs smaller dealers and their suppliers, often called peddlers, to get out on the highways and byways looking for scrap. And perhaps some manufacturing companies take a second look at old equipment that has been lying around for a few years and decide it's not worth bringing back on-line.....