Recycling Market Snapshot: First Quarter 2014


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.


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