Scrap volatility does not trump business savvy
May 26, 2013 | 07:00 PM
The Great Recession and its aftermath has been an interesting period for the scrap industry, to say the least. Demand and prices have dropped, soared, fallen and leveled out, while profit margins for the most part have been good.
Just two years ago, markets were in a state of near-euphoria after domestic mill productivity rebounded sharply and scrap export demand reached record levels. No one then thought that prices would reach historic highs, and yet 2011 saw the biggest average annual ferrous scrap values in history.
Although ferrous scrap prices were still at relatively high historical averages in the first quarter of 2013, they were well behind the first-quarter averages of the past two years. Still, No. 1 heavy melt, No. 1 dealer bundles, No. 1 busheling and shredded scrap are at strong levels, despite the volatility of the past two years. The combined average annual value of these materials through May 2013 is about 192 percent higher than it was 10 years ago, outpacing U.S. job growth, wages, energy costs, benefits (health care, pensions, etc.) and even the Dow Jones Industrial Average, which is up about 30 percent from 10 years ago (based on mid-May closing vs. yearly closing figures).....
To access AMM's full content, please log in below. If you do not have an AMM account, we invite you to take a free trial or subscribe below.
Already a registered amm.com user?
Access to amm.com editorial content is granted only to paid subscribers and trialists. If you do not have an active account in your own name, please either subscribe or take a trial and you will have instant access to amm.com content. Sharing your login credentials with individuals who are not subscribers represents a violation of AMM copyright.
Every morning, every minute no matter how often you follow the markets, there's an AMM subscription to fit your needs.
Not sure if you are ready to invest in a subscription right now? Take a free, no-obligation trial. Start your free trial today.