Ferrous

There are a lot of unhappy ferrous scrap processors as 2000 enters its second half, and many cite two reasons for their discontent.

On the revenue side, ferrous scrap prices began heading downward in May, and were heading lower yet by late June. “It’s just miserable,” says one auto shredder operator of the prices he is getting for his grade of ferrous shred.

There are still places to send ferrous scrap, he notes, but he is receiving just $100 per ton, plus is paying freight on the shipments. “We still have a little demand, but you can’t live on that price,” he remarks.

Another shredder operator reports that demand is fine, but he too is unhappy with the price situation, and is concerned that auto hulk supplies might constrict.

“I think it’s still attributable to imports,” says one processor of the current pricing situation. With domestic steel mills still melting at a fairly healthy capacity rate, many scrap processors are blaming the supply-demand imbalance on continued imports of scrap, DRI and pig iron from offshore sources.

At the same time ferrous processors are seeing less money come in the door, their operating costs have faced a fearsome hike in the form of higher fuel costs. “Gasoline prices going up just makes it worse,” bemoans one processor.

Whether paying freight surcharges or operating their own truck fleets, most scrap dealers are paying more both to collect their scrap as well as to ship it to consumers.