Skip to main content

Strong US ferrous future anticipated – with caution

A senior observer of the US ferrous scrap market expects 2022 to be a good year for the industry but cautions that continuing volatility may yet bring more change and surprises.

After several strong months, George Adams, ceo of SA Recycling, notes an easing since the turn of the year is down to several factors. In his capacity as a board member of the ferrous division of the Bureau of International Recycling, Adams says a large part of the workforce had been laid low with coronavirus in January, reducing demand and slowing scrap flows. In addition, storms hit most of the country with some areas reporting intakes off by as much as 30%.

‘While lower scrap volumes would normally be supportive of prices, demand [in February] is looking very similar to the weak demand seen in January,’ he notes in the latest BIR Mirror. ’With orders still slow, most sheet mills should have adequate scrap available for their current needs.’

Imported steel is being preferred to US steel, Adams adds, with steel service centres reducing higher-priced inventories. ‘Until the new mill orders start to return, sheet mill programmes should remain small and scrap demand lacklustre.’

Scrap dealers have turned to exports for better options, notably in the Asian market, Mexico and Turkey.
‘While some mills and dealers see a sideways market, others are more pessimistic in the short term. For now, mills may have the upper hand, but lower scrap intakes at dealer yards and the eventual return of orders for the mills should turn that equation around. The question is how soon this will take place.’

Adams concludes: ‘As always, we continue to see a trend towards volatility in which the virus still plays a role in the outcome. While most agree that 2022 will be a good year overall for scrap and steel, it may still be a year of more change and surprises.’

The division’s new president, Denis Reuter of TSR Recycling, reports in the Mirror, that German crude steel production in 2021 increased for the first time in three years – by 12% to 40.1 million tonnes, with scrap-rich electric steel production climbing 4.8% to 12.09 million tonnes. The country’s GDP rose 2.7%.

A UK perspective is offered by Shane Mellor of Mellor Metals who says domestic and export-destination steel mills are under pressure from suppliers to raise their prices for available secondary raw materials, which has culminated in a stalemate between consumers and sellers.

‘Exchange rates and high energy costs are impacting the entire supply and steelmaking chain,’ he writes. ‘This market situation, coupled with concerns over higher inflation, which is at 5.4% in the UK, according to latest official figures, has dented normal early-year trading levels.’

Don't hesitate to contact us to share your input and ideas. Subscribe to the magazine or (free) newsletter.

You might find this interesting too

Booming aircraft recycling market reaches new heights
Departing EuRIC frontman Katrakis joins Galloo
Big changes to come for ferrous sector

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Subscribe now and get a full year for just €169 (normal rate is €225) Subscribe