By Paul Ploumis 09 Oct 2015 Last updated at 20:17:02 GMT
CHICAGO (Scrap Monster): Ferrous scrap recyclers saw another steep price drop in the early October buying period, dimming hopes for a price rebound in the fourth quarter of the year. American Metal Market reported that Chicago- and Detroit-area steel mill buyers are paying $145 to $150 per ton for the No. 1. heavy melting steel (HMS) grade. Other regional mills are not buying scrap at all.
The market is affected by China's drop in steel consumption and its oversupply. Recycling Today cited a report by Asian Nikkei Review that referred to a USB Securities report that China's crude steel capacity will "exceed consumption by 441 million tons in 2015.” That 441 million tons is more than four times the annual steel production in all of the U.S.
Steel output in the U.S. is down 8.5% through the first eight months of the year, according to Brussels-based Worldsteel, a 5 million metric-ton drop. Thus, scrap processors face reduced demand from overseas buyers and domestic mills, despite the fact that the U.S. economy is not in crisis.
The Journal of Commerce reported that scrap metal exports from the U.S. dropped 4.7% by volume in the first half of 2015, compared to the first half of 2014. And exports are expected to keep falling if the U.S. dollar remains strong. However, if the dollar's value declines, exports could rebound as much as 8.5% in 2016.
Courtesy: www.wastedive.com
