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Low Mississippi River levels threaten scrap flow

Keywords: Tags  scrap, ferrous scrap, Mississippi River, pig iron, scrap substitutes, Army Corps of Engineers, ISRI, Institute of Scrap Recycling Industries Sean Davidson

NEW YORK — Steel raw materials shipments along the Mississippi River are facing severe delays due to low water levels, and the situation is likely to worsen if action is not taken, according to market sources.

Unless the U.S. Army Corps of Engineers takes emergency action to ensure water levels don’t fall below what is necessary to support inland waterway navigation, barge traffic along the Mississippi River between St. Louis and Cairo, Ill., could come to a halt around Dec. 10, the Institute of Scrap Recycling Industries told members this week.

"The problem is due to a combination of low water levels, the annual operating plan of the (U.S.) Army Corps of Engineers to reduce flow into the Mississippi from the Missouri River, and some rock formations in the water that need to be removed to allow passage of the barges during low water conditions," ISRI said.

Pig iron and scrap substitutes from New Orleans have to use the Mississippi River to move loads north at the same time southbound loads pass through the areas around St. Louis and Cairo, sources said.

"Only so many barges can be moved at one time, so expect big delays. Scrap metals flow both directions just because of the type of mills that are located in the rivers," one logistics source said.

"A lot of scrap moves in barges, along with everything else," he added. "Barges move at least 40 percent of scrap in the region and is now being changed over to move by rail or truck, or just not moving. This has and will shake up the balance of transportation equipment in locations."

Sources said the only solution is for the Army Corps to change its operating plan to keep water flows from the Missouri going.

There is a potential problem as scrap flows southward from St. Louis, a second source said.

"(One mill), in particular, which buys a large quantity of scrap via barge, will need to search for alternative tons. This could disrupt other districts as (the mill) redirects some scrap originally destined for their other plants. It is not clear if resolution will occur in time," he said.

Water levels on the Ohio River at Cairo—where it meets the Mississippi—dropped to 10.4 feet on Wednesday afternoon from 11.14 feet on Nov. 23. The water level is projected to drop to 9 feet by Friday afternoon, sources said. Barges and tugboats require a 9-foot draft to navigate (, Nov. 27).

On the Ohio, Lock 52 will be closed for 12 hours per day for the next four weeks, but it will operate 24 hours on weekends.

The Illinois River, which feeds into the Mississippi north of St. Louis, is also flowing slightly less than normal, with delays expected in certain areas.

"For many months, our difficulty in accessing the river—ordinarily a routine element in our sales program—has created serious challenges for us as a supplier to mills which typically prefer to source scrap along the inland waterways due to favorable freights," another third source said. "The additional loading costs and dead freight charges resulting from seriously low water levels has resulted in significantly reduced utilization of this mode of transport, putting further pressure on the already higher rail freight treatment of scrap."

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