2017 Mid-Year Review and Recycling Market Outlook

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The InStream team is happy to help our wonderful customers with any and all of their waste stream management and recycling needs! 2017 has been a great year so far for us here, and we look forward to continuing our service to so many great customers and with our wonderful service partners.

The overall recycling market has endured a hectic first half of ’17. Ferrous scrap metal, the most closely watched sector of the recycling market, has been relatively schizophrenic. Nonferrous metal and recovered paper have been more stable, but both markets have seen their share of volatility across the year’s first half.

The ferrous market has witnessed ups and owns in ’17, and currently displays market pricing that is the weakest of the entire calendar year. The seesawing ferrous tags have left observers puzzled: January pricing was up, February back down, March up, April down, May was sideways before a slight drop in June.

Market participants struggle to see which direction the ferrous market is headed in the long-term. The unexpected spikes and dips of this year have made even the normally chatty traders reticent to predict beyond more than a month ahead.

The nonferrous scrap market has shown more stability, albeit with the normal ebbs and tides of pricing variance. Copper pricing has traded in a rather narrow band in ’17. Scrap copper gained strength across the year’s first three months before stagnating a bit in Q2.

Like copper, aluminum scrap grades also gained some pricing strength in Q1. Unlike copper scrap, however, aluminum continued its ascension into Q2 before weakening slightly in the past six weeks.

Copper scrap has displayed overall price stability since the final months of 2016. Aluminum has shown stability for an even longer period. The outlook for both nonferrous categories remains solid, with most analysts predicting a continued period of steady pricing.

The recovered paper market has shown strength in ’17 thus far. Prices for OCC cardboard (old corrugated containers) and for SOP (sorted office paper) inched upwards throughout Q1 and settled in March at historically high levels. Though the pricing has slipped a bit since, the overall health of the market remains strong. Current consumer habits, including a spike in internet shopping, should keep the market for recovered paper in good shape.

Disclaimer – Prices and market related information shown has been obtained by many sources across many commodity markets.  InStream has not verified the information beyond our sources. Information is based on assumptions and projections based on current market drivers. This information is provided as a service and InStream is not recommending action based on the market information provided and is not responsible for the direction of markets and/or results based on the data provided.

Q2-Q3 Recycling Market Snapshot 2016

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The overall recycling market remains robust for the manufacturing industry, though ferrous scrap has underwent a period of weakness in the second and third quarters of 2016. Nonferrous scrap has displayed a distinct lack of volatility, while recovered paper has emerged as the healthiest slice of the recycling pie.

The ferrous market enters Q4 in the midst of a slow decline from the gains of early 2016. Most ferrous categories witnessed $45-50 per gross ton increases in April on the heels of a horrible winter. May continued the positive momentum before a slow retreat pushed pricing to its lowest tags since March. The falling prices mirror the July-September trend of 2015, and further decreases of $20-30 are expected in October. Many experts project that October will be the bottom, which would also keep in line with last year’s precedent. Oversupply remains the single biggest factor holding the ferrous market back.

The nonferrous scrap market has been much more stable than the ferrous sector, though not without a few bumps in the road.

Copper pricing has seen periods of upward and downward movement in Q2 and Q3, but per pound prices for most major categories have remained within a relatively narrow $0.20 band. Current pricing sits almost exactly where it was at the beginning of April. The long-term outlook for copper scrap is stable, albeit one of limited strength. Copper consumers remain well supplied and primary copper production continues to increase. These factors temper the overall forecast for the red metal.

Like copper, aluminum scrap grades hold present-day prices very similar to those of early Spring. After strengthening a bit in the dog days of summer, aluminum tags have retreated ever so slightly across the past two months. Pricing may remain haggard in the winter months due to decreasing export opportunities and the impact of seasonal weather on collection rates.

The recovered paper market was the big winner, however, enjoying substantial gains throughout Q2 and Q3. Mill pricing for cardboard (OCC) jumped an average of $40 per ton across the six-month period, while SOP pricing witnessed slightly more modest gains of around $30. Many analysts project a strong long-term outlook for the recovered paper market due in large part to the impact of online shopping.

 

Disclaimer – Prices and market related information shown has been obtained by many sources across many commodity markets.  InStream has not verified the information beyond our sources. Information is based on assumptions and projections based on current market drivers. This information is provided as a service and InStream is not recommending action based on the market information provided and is not responsible for the direction of markets and/or results based on the data provided.

Q1 Recycling Market Snapshot 2016

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The recycling market suffered through some relatively dark days in the opening months of 2016, as ferrous scrap metal kept the overall recycling market tamped down. Much like the weather, the market is showing signs of heating up as we approach the warmer days of summer.

The ferrous market displayed gains in January and led many to believe that the lows of November would quickly be forgotten. Pricing did not increase substantially going forward, with the February market largely stagnant and March experiencing only minimal gains.

Good news has emerged in April, however, as ferrous pricing is up around $40-$50 per ton in many of the domestic regions, reaching heights unseen since the summer of 2015. Industry experts do not feel this trend will continue, however, and predict that ferrous prices will hold relatively steady in the short term.

The early part of 2016 has been kinder to the nonferrous scrap market, but copper and aluminum scrap are still trading at relatively low prices.

Copper pricing underwent a volatile January, steadied in February before strengthening in March. The fundamentals for the scrap market remain unconvincing so expectations of price increases are few and far between.

Aluminum scrap grades have remained almost static in 2016, with most categories gaining only a few cents per pound across the year’s first three months. Much like copper, many market experts expect aluminum scrap to remain relatively stagnant with regards to pricing.

Though pricing for recovered paper has largely remained unchanged across the year’s first few months, the overall health of this sector of the recycling market is very strong. Cardboard in particular should remain a staple of the recycling industry going forward as massive spikes in online shopping continue to create demand for recovered paper.

Plastic scrap continued its long period  of weakness in the first quarter of ’16  as oil prices descended to levels last seen in late 2003. Demand for plastic scrap remains healthy, however.

 

Disclaimer – Prices and market related information shown has been obtained by many sources across many commodity markets.  InStream has not verified the information beyond our sources. Information is based on assumptions and projections based on current market drivers. This information is provided as a service and InStream is not recommending action based on the market information provided and is not responsible for the direction of markets and/or results based on the data provided.

Recycling Market Snapshot: Autumn 2015

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It has been another busy year for us here at InStream thanks to all of our wonderful customers. To date we have recycled over 68 million pounds of material for our clients in 2015. We value working with such diligent customers who responsibly dispose of these materials, and we look forward to meeting all of our clients’ waste stream management needs in the future.

As we enter into the heart of Autumn it’s time to take a look at what has been a very strange period in the recycling market, particularly for scrap metal.

The ferrous market limped into Q4 on the heels of three straight months of decreasing prices. Market watchers were caught by surprise when that trend not only continued in October, but actually became even more drastic. Pricing for most major ferrous categories dropped between $50 and $60 per gross ton across the United States.

Though there are numerous factors behind this period of price deterioration, the most important are low commodity prices worldwide, the strong dollar and its effect on importation, China’s slowing economy and very low domestic steel production.

Sadly there is still no sign of recovery for scrap steel, and industry experts are expecting further price erosion in November of around $10-20 per ton. Until domestic steel production increases or cheap material from foreign suppliers dries up, demand for domestic steel scrap will remain low and pricing will continue to suffer.

Nonferrous metals have fared poor, as well. Copper scrap has been in a slow decline since the middle of the year and the fundamentals for the red metal offer little hope that price increases will emerge anytime soon. Even so, copper remains the surest bet in the scrap metal market.

Aluminum scrap has fared even worse than copper in 2015, with most major grades losing about $0.20 per pound since the year began. Prices are not expected to rise in the short term, either, with waning year-end demand further pressuring aluminum tags downward.

The recycled paper market has also been rather strange this year, with OCC (old corrugated containers) prices trending higher over the past six months while SOP (sorted office paper) prices trend downward. OCC pricing has remained constant since August, when pricing reached its highest level since one year earlier. This is astounding when compared to SOP which is currently fetching its lowest prices since December of 2013!

Plastic scrap pricing remains very low. The plastic market is largely tied to the price of oil which continues to dip lower due to increased production worldwide and lower demand from China. While this is good news for the consumer at the gas pump and purchasing agents buying packaging material, it does mean that plastic scrap has far less value than it did in the past.

 

Disclaimer – Prices and market related information shown has been obtained by many sources across many commodity markets.  InStream has not verified the information beyond our sources. Information is based on assumptions and projections based on current market drivers. This information is provided as a service and InStream is not recommending action based on the market information provided and is not responsible for the direction of markets and/or results based on the data provided.

Ferrous metal market update

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The ferrous scrap market witnessed a historic month in February. It would be hard to imagine a worse month for the industry, as tags fell as much as $120/GT for premium grades (busheling, bundles) and up to $90/GT for shredded steel and cut grades. The collapse further weakened a market that witnessed approximately $60/GT drops across all ferrous categories in the final three months of 2014. Pricing for prime grades have now fallen $190/GT over the past year and around $170/GT for the cut grades.

Ferrous prices in February reached levels last seen in the dark days of 2008. Several factors contributed to this collapse. The lack of export markets for US scrap continues to create a glut of material. The strength of the dollar is also a major factor, as foreign dealers pushed their material into the US. February also witnessed a 12-year low in iron ore prices.

Scrap dealers also exacerbated the problem by holding substantial amounts of material in their yards late last year in anticipation of the traditional price increases in January and February. These factors colluded to produce a perfect storm for a market collapse.

The price degradation has largely eased in March. Most grades in the Southeast stayed sideways or witnessed slight dips. On the heels of a catastrophic February, this can be viewed as a small victory.

Pricing in the Midwest continued to slide, with prime grades dropping a further $15-20/GT and cut grades losing $5-10.

Industry players expect the market to remain depressed in the short term as all of the factors mentioned above continue to define the market.

Recycling Market Snapshot: Third Quarter 2014

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The recycling market enjoyed a period marked by stability over the last three months. Ferrous pricing remained unwavering while nonferrous metals and paper scrap witnessed minimum volatility.

A major influence on the scrap metal market in general, and on ferrous material specifically, is the ongoing transportation difficulty in the domestic sphere. Transportation issues for the scrap metal market abound and scrap dealers have mentioned the difficulty of procuring both freight and rail car for accrual purposes and for mill shipments. With less scrap being exported, more material is clogging the transportation infrastructure of the domestic market.

Ferrous scrap tags have remained relatively stagnant since June. Major grades like No. 1 HMS, busheling, shredded auto scrap and machine shop turnings have all remained sideways throughout the summer months in most US regions.

The long-awaited price increases rumored for September proved to be false as the market continued to show little sign of change. Industry analysts believe pricing for ferrous scrap should remain strong as mills begin to build inventory in anticipation of weather-related interruptions during the winter months.

Nonferrous scrap metal also enjoyed a period of relatively steady pricing throughout 3Q. Strengthening domestic and European industrial activity pushed nonferrous tags higher in July, but prices began retreating by September due to lower domestic and export demand.

Higher primary copper tags in July pushed scrap pricing upwards in spite of shaky demand. Pricing dipped in August before leveling off in September. Market observers seem resigned to continuing stable copper pricing throughout 4Q and into the beginning of 2015. Renewed Chinese thirst for copper scrap would wake the market from its long period of stagnation.

Aluminum has displayed more pricing stability than its traditionally more volatile red cousin. Scrap aluminum has traded in a a narrow band throughout 3Q and has largely remained unchanged since March.

Renewed supply concerns have emerged concerning aluminum sheet scrap as the thirst for the material in the auto market continues to expand. A growing number of automakers are transitioning to models constructed of aluminum, a trend that should continue to buttress scrap tags in the long-term.

Stainless steel scrap displayed strength in July before modest losses in August. September witnessed further price erosion as both 316 solids and 18-8 solids lost approximately $0.08 per pound. High prices of primary nickel helped offset low demand in July and August.

Though the market for SOP (sorted office paper) continued the overall trend of stability in 3Q, OCC (old corrugated containers) was not as lucky. Pricing for OCC dipped $5 per ton in August and dropped an additional $5 in September. SOP strengthened in July, gaining $5/ton, and has held steady over the past two months.

 

Disclaimer – Prices and market related information shown has been obtained by many sources across many commodity markets.  InStream has not verified the information beyond our sources. Information is based on assumptions and projections based on current market drivers. This information is provided as a service and InStream is not recommending action based on the market information provided and is not responsible for the direction of markets and/or results based on the data provided.

Recycling Market Snapshot: First Quarter 2014

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The recycling market has witnessed an eventful first quarter in 2014. Many producers of ferrous scrap material have felt the effects of the AMM pricing report changes and of a largely weak scrap metal market. Nonferrous scrap has seen both the good and bad. Copper scrap continues along in a prolonged period of stagnation while aluminum scrap has enjoyed pricing strength thus far in ’14 and has significantly outperformed the other scrap categories.

Paper recycling has brought much better news thus far in 2014 with monthly price increases becoming the norm.

Ferrous scrap has struggled across the first three months of ’14. Prices for most major grades jumped a bit from December ’13 to January, but have now suffered two straight months of price decreases. Tags for many of the most prominent categories fell an average of $15-$20 per gross ton in March.

Most analysts point to continued disinterest from Chinese buyers and a new reluctance from Turkish buyers as factors pushing the tags downward.Material from Canada has also flooded the domestic market further depressing prices.

Though new housing construction was a bright spot as 2013 progressed, the ferrous scrap market needs commercial construction to rebound significantly. Advances in the energy sector, specifically with regards to fracking, could lead to strength for scrap ferrous material. Most machinery tied to the industry requires steel.

One common theme in the recent past has been the overabundance of scrap shredders. It’s becoming increasingly difficult for these operations to be profitable. A ballooning amount of shredders, all of which require significant feedstock to remain economically feasible, does not make much sense in a world with a finite amount of available material.

Copper scrap has struggled in 2014, with pricing drops far more common than the infrequent upticks. March has been especially rough for the red metal scrap, with tags about $0.20 per pound lower than they were in February and with primary copper prices reaching lows not seen since 2010.

Though January was a strong month for copper scrap tags, it was followed by two straight months of diminishing returns. Copper seems to be stuck in a rut and only increased demand from China can get it back on track (estimates say China accounts for approximately 40% of global copper consumption). Copper could also benefit from investment in several industries: power generation and transmission, high-speed rail and home construction.

March scrap tags were especially depressed by news that two major Chinese buyers had reneged on orders from US sellers. This coupled with geopolitical concerns regarding the situation in Ukraine furthered the pricing weakness.

Though scarcity of copper scrap has kept prices from complete free fall, Chinese demand must not deteriorate further if market participants hope to see pricing increases going forward.

Pricing for aluminum scrap has been on a consistent upward trend in ’14, with slow but steady growth. Tags have averaged about a $0.01 per week increase over the year’s first three months.

Increased demand continues to strengthen aluminum scrap. The transportation/automotive and aerospace industries are largely the engines of this growth. Though ’13 witnessed unprecedented demand for aluminum from the automotive sector, ’14 could actually be even better for scrap due to Ford’s announced substitution of aluminum for steel in auto body sheet.

Pricing for recycled paper products has been especially positive in 2014. OCC (old corrugated containers) dropped an average of $5 per gross ton across the domestic regions in January before stabilizing in February. March witnessed an incredible average increase of $25, the largest monthly price increase in the last two years.

Though SOP (sorted office paper) did not enjoy such a drastic increase as OCC in March, it’s pricing did increase for the third straight month and settled an average of $5 higher.

Market participants have mentioned that extreme winter weather has left paper mills with a scarcity of material which has underpinned pricing.

One other bit of good news is that manufacturing activity continues to moderately increase. Though the wintry conditions were responsible for utility outages, decreased production schedules and led to supply chain disruptions, we continue to see our customers producing more and more product. We’re glad to be along for the ride!!!

 

Disclaimer – Prices and market related information shown has been obtained by many sources across many commodity markets.  InStream has not verified the information beyond our sources. Information is based on assumptions and projections based on current market drivers. This information is provided as a service and InStream is not recommending action based on the market information provided and is not responsible for the direction of markets and/or results based on the data provided.

Recycling Market Snapshot: December 2013 and Year in Review

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InStream Environmental would like to wish all our valued customers and friends a very Happy New Year!

2013 was a wonderful year for our team and we truly enjoyed working closely with our clients to bring green savings and increased revenue. We expect continued growth in the manufacturing sector and hope that 2014 is another great year for us and our partners.

The recycling market was mixed in December, with continued strength in ferrous scrap and some weakness in other categories.

December prices for ferrous scrap jumped $10-20 per gross ton for major grades of obsolete and prime scrap. Tight supply and weather-related transportation issues helped buttress the pricing strength.

Industry participants forecast further increases in January, especially with regard to obsolete grades. Increased foreign demand and steady domestic mill demand should help ferrous prices remain strong in the short term.

Pricing for ferrous slipped from the start of 2013 into the summer before gathering strength in Autumn and ending ’13 at higher levels than when the year began.

Copper scrap pricing enjoyed robust gains over the monthly period with most grades settling $0.12-0.20 per pound higher than in November. Copper scrap’s renewed strength is tied to a resurgence in Chinese demand. Exports of copper scrap during the last few months of ’13 reached the considerable levels of 2011.

Copper scrap pricing slipped considerably over the course of the first five months of ’13 before displaying stability in the final few months.

Aluminum scrap prices slipped a few cents per pound for most grades in December. Though Chinese demand for aluminum scrap, like that of copper, continued to gain strength in the final few months of ’13, an oversupply of the material may keep the market slightly depressed in the short term.

Aluminum scrap prices trended downward in ’13, with only the first few months suggesting any real strength. April onward displayed slow deterioration.

Pricing for OCC (old corrugated containers) was down $15 per ton in the Southeast in December to set the lowest pricing of the entire year. OCC was down $10 in most other regions.

Though the average price for OCC was higher in ’13 than’12, pricing actually enters 2014 at a lower point than it entered 2013.

SOP pricing remained unchanged in the Southeast, Midwest, Southwest and in the West Coast markets. Pricing in the Northeast dropped $10. Pricing for SOP was strongest early in the year on the back of a wonderful 2012. Small upticks in July and August could not reverse the general downward trend.

 

Disclaimer – Prices and market related information shown has been obtained by many sources across many commodity markets.  InStream has not verified the information beyond our sources. Information is based on assumptions and projections based on current market drivers. This information is provided as a service and InStream is not recommending action based on the market information provided and is not responsible for the direction of markets and/or results based on the data provided.

Recycling Market Snapshot: November 2013

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The traditional end-of-year slowdown for ferrous scrap market was nowhere in sight in November. Other recyclables did not fair as well, however, but there is hope in most markets for pricing strength in the near future.

Pricing for ferrous scrap jumped considerably from October’s levels. Most major grades settled at approximately $30 per gross ton higher across all domestic regions. Many scrap consumers bought in bulk to replenish their supply in an effort to stay away from further price increases in Decmber and January.

Though the end of the year is traditionally a period of weakening for the scrap ferrous market, this year looks to conclude rather differently. Market observers point to low inventory and the limited transportation opportunities tied to bad weather as major reasons behind the expected pricing increases.

Tags for copper scrap grades fell slightly from October’s levels with major grades like bare bright and No. 1 copper losing around $0.15 per pound. Rumors abound that renewed Chinese appetite for the red metal could lead to a strong  1Q for copper scrap pricing.

Aluminum scrap witnessed less dramatic price erosion, as most major grades fell $0.01 per pound. The aluminum market has enjoyed minimal volatility in the recent past due to strong demand from the automotive industry.

The recycled paper market witnessed decreases in the Southeast. Pricing for OCC (old corrugated containers) fell $5 per ton, while SOP (sorted office paper) also dropped $5.

OCC pricing in the Midwest and Southwest also fell $5, while prices in the Northeast remained unchanged from October’s levels. SOP prices dropped $10 in the Southwest but remained stable across the remainder of the regions.

 

Disclaimer – Prices and market related information shown has been obtained by many sources across many commodity markets.  InStream has not verified the information beyond our sources. Information is based on assumptions and projections based on current market drivers. This information is provided as a service and InStream is not recommending action based on the market information provided and is not responsible for the direction of markets and/or results based on the data provided.

Recycling Market Snapshot: October 2013

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October was a relatively quiet month in the recycling market with plenty of the commodities selling at similar price points to those of September.

Ferrous scrap actually outperformed some of the early predictions being expressed in late September as some categories like HMS (heavy melt steel) held steady across all domestic regions.  Busheling and several other classifications witnessed slight losses, however, usually around $5 per gross ton.

Market participants expect higher tags in November and are  predicting $20-30 increases.

Copper scrap enjoyed a healthy October and most scrap grades sat around $0.10 per pound higher month-on-month. The strength may be short-lived due to increasing pressure on primary copper resulting from an overabundance of supply.

Pricing for aluminum scrap could not replicate the strong performance of the copper market. Though many aluminum scrap classifications were trading at similar levels to September, some grades saw small dips of a penny or two per pound. Market experts point to light purchasing dynamics as the main reason behind the minimal weakness.

The recycled paper market displayed stability in October. Pricing for both OCC (old corrugated containers) and SOP (sorted office paper) remained unchanged from September’s levels across all the domestic regions.

 

Disclaimer – Prices and market related information shown has been obtained by many sources across many commodity markets.  InStream has not verified the information beyond our sources. Information is based on assumptions and projections based on current market drivers. This information is provided as a service and InStream is not recommending action based on the market information provided and is not responsible for the direction of markets and/or results based on the data provided.