CHICAGO The iron and
steel scrap producer price index (PPI) took a nosedive in
October, falling 11.4 percent from the previous month and 27.3
percent from the same month last year, the latest Bureau of
Labor Statistics (BLS) report shows.
"Scrap (prices) will be up for
December," a bar market source said this week, "but who knows
how long that lasts, because theres not too much upside
(for demand) after December."
The top sales executive for a
multi-branch service center questioned the scrapyard-to-mill
business model, saying the dynamics allow certain parties to
renege on negotiated tons when demand or prices slip, leaving
too much material on the ground and putting further downward
pressure on pricing. "This is what has to change," he said.
"How about if you agree to take 10,000 tons, then you take
The PPI for steel mill products
fell 1.9 percent last month following a 1-percent increase in
September, the BLS data show.
Despite sheet producers
recent announcements of a $50-per-ton increase for December (
amm.com, Nov. 7), a source at one Mississippi
Valley steel processor predicted that "if the price goes up,
its probably a $20 event. Were not seeing a lot of
additional demand, (so) we dont anticipate much change in
the pricing game."
The October PPI for aluminum
mill shapes rose 1.4 percent from the previous month, while the
aluminum scrap index increased 4.9 percent. The PPI for copper
and brass mill shapes rose 2.8 percent and copper scrap moved
1.2 percent higher in the same comparison.