PITTSBURGH Scrap prices are expected to mimic changes
in order books at steel mills going forward as the February
market appears willing to just roll over, according to Russ
Rinn, president and chief operating officer of Steel Dynamics
Inc subsidiary OmniSource Corp.
As you look at scrap pricing trends, it is going to
follow order books of steel mills. As soon as prices move up,
(scrap) will follow. So far, it has been kind of steady,
Executives at Fort Wayne, Ind.-based SDI have been pleased
with a continuation in order intake, they noted during a call
to discuss fourth-quarter and full-year earnings.
As for the direction of the February market, it is shaping up
to be flat to a soft sideways, Rinn said.
Could be down ten bucks or could be up by ten
Weather has not been a factor in pushing scrap prices up, and
order books at domestic mills are expected to be the primary
Looking further out, Rinn does not expect 2013 to be a volatile
year. I see scrap trading largely in a range and not have
spikes. If they do (have spikes), they will reverse themselves
quickly, Rinn said.
OmniSource, the companys metals recycling division,
posted a healthy fourth-quarter performance, logging higher
profit in spite of fewer volumes. The division earned $25.8
million in operating profit in the three months ended Dec. 31,
compared with $15.7 million in the same period a year ago.
OmniSource posted $741.3 million in sales in the fourth quarter
vs. $856.4 million in the same comparison.
In our December guidance, we suggested that metals
recycling was expected to deliver a stronger financial
performance in the fourth quarter, and the teams
execution was even better than anticipated, SDI president
and chief executive officer Mark Millett said.
Ferrous shipments in the fourth quarter totaled 1.2 million
gross tons, 5.8 percent lower than the 1.3 million gross tons
shipped in the year-ago quarter. Nonferrous shipments totaled
251.1 million pounds compared with 255.1 million pounds in the