The Primary Competition
A stretch of cold, icy, and snowy weather brought a temporary boost to nonferrous scrap prices in parts of the Midwest and Great Lakes industry region in January. But the fears of weather-induced short supply proved temporary, and certainly proved to be no match for the wider problems facing the nonferrous scrap market.
During that bad weather stretch, some scrap aluminum prices moved up while LME prices continued to get weaker. “Basically, it was because of a lack of material for the smelters due to bad weather, plus the nonferrous shredder material is down,” says Ansel Aberly of SLC Recycling, Warren, Mich.
While deep snow may bring an increase in prices, it most likely also entails an increased effort to procure scrap. Aberly, who enjoyed a New Year’s vacation down south, came back to find “a foot of snow, then it got worse and turned into 27 inches of snow.” He adds that “it’s a pain to get material” in those conditions. “The dealer trade is difficult. The plant trade is difficult because snow buries the dumpsters or the lugger boxes. The plants are producing the scrap, but it’s difficult to pick up.”
Thus, even the benefits of the temporary price boost can be offset by increased manpower and fuel costs to transport the scrap.
While the bad weather caused a temporary stir in prices, the ongoing outlook remains the same: Nonferrous scrap is having a hard time competing with primary materials that are being mined in record amounts and with advanced methods that are much more cost-effective than mining techniques of previous decades.
“The problem is you’ve got electrowinning producing cheaper mined copper,” says one processor. “You don’t need high grade ore to have a cost-effective mining operation anymore.”