Nucor Corp.s direct-reduced iron (DRI) plant in Louisiana
scheduled to come online later this year will initially impact
imports of alternative iron units and wont put pressure
on prices of prime scrap grades, according to OmniSource Corp.
"It has got to go
through startups, but I am thinking that it will impact pig
iron and other substitute markets. Until it comes on line and
produces in the marketplace, it is too hard to tell," Russ
Rinn, president and chief operating officer of OmniSource,
Steel Dynamics Inc.s recycling subsidiary, said during an
earnings conference call.
Imported pig iron
could come under most pressure from the new source of material
from the Nucor facility. "It will either depress it or make it
unaffordable to bring in," Rinn said.
Key drivers for scrap
in the near term are domestic mill utilization rates as well as
currency exchange rates, Rinn noted. Scrap flows have been
steady and inventories at mills and scrapyards are thin.
Lower ferrous scrap
shipments and virtually flat nonferrous shipments were unable
to stymie OmniSources second-quarter results.
The metals recycling
division posted operating earnings of $15.8 million for the
three months ended June 29, more than triple earnings of $5.1
million in the same period a year earlier although down 37
percent from the first quarter. Sales fell 9.4 percent to
$794.8 million from $876.7 million a year ago.
shipments totaled more than 1.33 million gross tons in the
second quarter, down 10.2 percent from nearly 1.49 million tons
a year earlier, while nonferrous shipments slipped just 1.7
percent to 254.5 million pounds from 258.9 million pounds as
lower pricing restrained the flow of copper and stainless steel
Green Fence, which places strict regulations on scrap imports,
contributed to the decrease in shipments, Steel Dynamics
president and chief executive officer Mark Millett said.