start-up of Nucor Corp.s direct-reduced iron (DRI) plant
could eventually put downward pressure on prime grades of scrap
metal, although nearer term, a recent blast furnace outage may
push scrap prices up, according to the top executive at
Commercial Metals Co. (CMC).
"Whenever demand and
supply are interacting, there will be an impact. This (DRI
facility) may free up stocks or availability of prime scrap so
it could have an impact but we will wait and see," CMC
chairman, president and chief executive officer Joseph Alvarado
told investors on a June 27 call to discuss the Irving,
Texas-based companys financial results.
Nucors 2.5-million-ton-a-year DRI facility in Louisiana
is set to start production late in the third quarter (
amm.com, April 19). The industry has been waiting
to see whether its commissioning will curb U.S. pig iron
imports or lower prime scrap prices by reducing demand.
Nearer term, however,
the scrap price outlook could be more toward the upside,
Although Alvarado was
evasive in providing an outlook for Julys scrap prices,
he did acknowledge that the AK Steel Corp. blast furnace outage
in Middletown, Ohio, could drive up scrap demand as
electric-arc furnace mills aim to fill any resulting void.
always too early to know until we start transacting," Alvarado
In the companys
third quarter ended May 31, CMCs Americas Recycling
division was able to turn a profit in the face of weaker
revenues and fewer shipments in a lower selling price
The segment recorded
an adjusted operating profit of $3.2 million on $341.7 million
in sales, down 19 percent and 17.1 percent, respectively, year
The segment shipped
588,000 tons of scrap in the quarter, down 9.3 percent from the
year-ago period. Of the total, 532,000 tons were ferrous scrap,
which saw prices down 10 percent year on year, and 56,000 tons
were nonferrous scrap, CMC said.
Average ferrous selling prices of $331 per ton were 6
percent lower than in the third quarter of 2012.