Ferrous scrap’s wild ride poised to continue
Oct 31, 2012 | 07:00 PM
The uncertain state of global economies continues to keep various scrap market factors in play, a number of analysts and players said at the Institute of Scrap Recycling Industries Commodities Roundtable Forum in Chicago.
From ferrous to aluminum to stainless, scrap markets are expected to see fluctuations in demand, price and availability, a somewhat surprising development following a relatively stable 2011--a year that seemed to point toward a more even and smooth economic recovery, several forum moderators and panelists said during the September forum.
For example, average ferrous scrap prices--a composite of No. 1 heavy melt, No. 1 dealer bundles and shredded delivered to consumers in Chicago, Philadelphia and PittsburghÑstood at about $462 per gross ton in January 2011, the highest level since just before the financial crisis and one of the highest levels in history. Since then, scrap prices have fallen 30 percent to around $323 in October.
Many spoke at the ferrous roundtable of a changing environment in scrap markets. Michelle Applebaum, managing partner of Chicago-based Steel Market Intelligence, said that volatility is here to stay in scrap pricing, reflecting an overall imbalance in nearly all aspects of the steel industry. Others voiced concerns about scraps wild ride.
Although prices barely fluctuated during 2011--they averaged $468 per ton in January 2012, up $6 from the start of 2011--that has not been the case this year, falling nearly $140 in a volatile market. September and October were strong examples of the volatility, with what were expected to be sideways markets evolving quickly into downward movement.....
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