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.
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