Nonferrous Scrap: North America

The supply of copper scrap seems to be relatively consistent and buying metals is not as much a problem now. The markets have recovered from the large fall in September. Now that copper is back in the $3.50 range, material is back flowing again.

Aluminum prices aren’t changing, regardless of what the market is doing and tending to get weaker. We won’t see any kind of major movement in the aluminum prices maybe until the end of the first quarter of 2012, assuming that we get bad weather in the Northeast. For the next two months, at least going into the Asian markets, we see a definite slowdown as they slow their buying down ahead of the Chinese New Year, combined with what we believe to be less demand in the Chinese market than in previous years. It seems that there is less money available for Chinese buyers to buy, and it has become sort of a ”seller beware” situation on scrap going to China, making sure the buyers are well financed and prepared to stand up to whatever contracts you have with them. We don’t want to revisit what happened several years ago.

The amount of scrap yards that are shipping directly to China is down quite a bit. There are less Chinese buyers out there canvassing the yards, buying scrap. The bigger buyers are still out there buying scrap on a regular basis. It is important even with the larger companies that we keep a close eye on their creditworthiness. As sellers, there has been a lot of changeovers in the way they buy their scrap, especially in mixed type loads under their new regulations and what metals can be mixed in what loads. Knowing all that information and how material needs to be packaged in China now is very, very important in doing continuous business.

Domestic ingot makers are consistent. It appears the amount of material that they are buying now is in relative equilibrium to the material that is available. There does not seem to be much ingot-maker metal going overseas. Most of it is staying domestically and they are buying it at prices as they need to. They haven’t been going overboard on pricing.

Here in the Northeast, we have had very good weather. If the weather turns bad and there is a lot of snow and continued bad weather, it will slow material flow. At the moment, however, material is flowing freely. There is material to buy. The only slowdown in material is price related and that was probably occurring more so when the copper price was in the low $3 range. Now that we are back into the mid-$3 range, at the moment, material is being sold.

The aluminum secondary market is very weak. The aluminum primary market isn’t strong either. In general, aluminum prices are dull. It is the same story with stainless steel. Orders are done through the end of this year. There is not a lot of hope for the very beginning of the year. The nickel market has been very slow too.

Steve Solomon can be contacted at steve@solomonmetal.com.