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.

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