Full of Scrap: Past trends may offer a guide to future scrap pricing

Sep 30, 2012 | 07:00 PM | AMM staff

Tags  U.S. ferrous scrap market, ferrous scrap market outlook, 2012 U.S. ferrous scrap outlook, AMM Staff

As lower September scrap deals closed out the third quarter, a combination of a long-term drop in scrap values, volatility in mill orders and production, and an often-mercurial 2012 export market had sellers facing some of the more fundamental questions about where business is heading.

Many North American scrap market players often express trepidation as the fourth quarter gets under way over what the end of one year and the beginning of the next might bring. While not necessarily predictive, the past does provide a guide to some overall trends and perspectives. For starters, here’s a quarter-by-quarter look at how the 2012 market has developed thus far:

-- First quarter: The year started with a bump up from the fourth quarter of last year, mostly due to an exceptionally strong January. But weaknesses began to emerge as the quarter progressed, an indication of the mini-bust to come.

-- Second quarter: Prices fell each month, and on average the quarter was about 7 percent weaker than the first quarter. June was an especially tough month, with prices falling hard across the board. Declining exports took much of the blame.....