Ferrous Department

Peter Marcus, a steel industry analyst and managing partner of World Steel Dynamics Inc., Englewood Cliffs, N.J., determined several years ago that the electric arc furnace (EAF) steelmaking revolution would eventually result in a shortage of obsolete iron and steel scrap.

While he may have backed off from his speculation regarding $200 number one heavy-melt bundles, Marcus remains convinced that the steel industry is still facing a looming shortfall of scrap and other melting units.

In his presentation to ISRI Mega Roundtable attendees, Marcus said “the scrap price setback in 1998 does not prove to us that there is, or is not, an oversupply or a shortage of steel scrap on a long-term basis.” Having said that, however, Marcus referred again to his statistical analysis that foresees a scrap shortage because of a dwindling pool of obsolete scrap.

“Gains in recovery of [obsolete scrap] are potentially dampened in the next 12 years by the relatively slow growth of the global reservoir of steel scrap that is, on average, eight to 30 years old,” he commented.

“Steel scrap prices are poised to rise sharply, we believe,” said Marcus, who predicted prices to rise from their current $100 per ton U.S. average to $135 or $140 per ton by the summer of 2000.