Monthly Market Report
As we forecasted and expected, May prices on scrap steel are down $20-$25 across the country. Domestic mills are blaming the scrap price discounts on lower mill utilization rates and lackluster sales into early summer. Mill buyers are purchasing smaller packages in May and looking to push scrap prices down further to balance the supply with new steel demand.
As for exports, there is very little export activity from Asia and India off the US West Coast as demand in this region continues to struggle and their scrap demands are being met closer to home.
Base metals continue to take a beating on their respective metal index markets - London Metal Market (LME) and COMEX. Over the past 30 days, aluminum in is down $ 0.03 lb, copper is off $ 0.30 lb and is the lowest it's been since June 2010 and nickel has slid $ 0.69 lb. These price weaknesses are also largely due to the weak Chinese economy and its inability to hit previously set forecasted manufacturing targets.
Many are waiting to see if the recent incidents at the Bingham copper mine here locally will cause a shortage of available copper cathode and as a result make copper producers more reliant on copper scrap to manufacture new copper products thus pushing scrap prices higher. Although it is still too early to see the full effects of Kennecott’s decreased production, it will more likely raise the price of copper cathode above what the market will bare before it will impact scrap prices and that may take months.