CMC surprised by pace of scrap's climb, sees more increases ahead

Dec 21, 2010 | 01:28 PM | Lisa Gordon

Commercial Metals Co. (CMC) was caught off guard by the velocity of the scrap price run-up during the final months of 2010, the company said Tuesday, adding that domestic producers who were too conservative in their melting forecasts helped propel the price gains.

The domestic market is mirroring what is happening on a global scale, and scrap prices are expected to be up again in the first two months of 2011—and trend higher for the first half of next year against the comparable 2010 period, company executives said.

"Internationally, we are witnessing a similar scenario to calendar year 2009, where ferrous scrap prices rose sharply in November and December followed by steel prices," the Irving, Texas-based company said in its earnings statement. "Inventories across the supply chain, whether in the U.S. or in international markets, are relatively low. A seasonal demand pickup in early 2011 may lead to higher ferrous scrap and steel prices." ....