Scrap Price Services

North American Scrap Prices

China Scrap Prices

India Scrap Prices

European Scrap Prices

For the week ending Friday, January 20th

Ahead of next week’s Chinese New Year celebrations, commodity markets got support this week from dollar weakness, reports of progress on the European sovereign debt front, and further indications that China is managing a “soft landing.” The nonferrous metals posted solid gains this week, with LME official 3-mo. copper opening the week up at $8,025.50/mt on Monday and climbing to $8,370/mt by Thursday morning. Aluminum prices strengthened as well, with LME official 3-mo. aluminum up over $2,200/mt despite LME aluminum stocks breaking the 5 million mt mark for the first time ever this week.

In New York, COMEX March copper opened the week at $3.63/lb. and reportedly climbed as high as $3.82 in intra-day trading on Thursday. Oil prices advanced as well, with NYMEX crude for March delivery back up over $100/bbl for most of the week. Stocks on Wall Street advanced as well, with the Dow Industrials posting gains in three consecutive trading session to close at 12,623.98 on Thursday. On Friday, base metal prices pulled back somewhat following sharp gains earlier in the week. In London, Reuters reports that LME official 3-mo. copper was down to $8,255.50/mt this morning, while official 3- mo. lead and zinc prices eased to $2,160/mt and $2,016/mt, respectively. In New York, COMEX March copper, which hit a four-month high of $3.834/lb. in intra-day trading, fell back to $3.74/lb. this afternoon. Oil prices pulled back as well, with crude oil down below $99/bbl, while gold futures firmed around $10/to to $1,665/to today as Greek officials continued their debt negotiations with bank industry representatives.On Wall Street, stocks were mixed with the Dow Industrials up around half a percentage point this afternoon while the S&P 500 and Nasdaq slipped as the yield on 10-yr Treasuries climbed to 2%.

Macro news…
The economic news in the U.S. this week was largely positive as inflation remains in check for now, weekly initial unemployment claims plunged to 352,000 and the manufacturing sector continues to expand. The Federal Reserve reported this week that industrial production increased 0.4% in December while manufacturing improved 0.9% as compared to November and was up 3.7% from December 2010. For the fourth quarter, the Fed notes that “…the output of durables moved up at an annual rate of 6.3 percent, with gains of nearly 10 percent or more in wood products; primary metals; electrical equipment, appliances, and components; motor vehicles and parts; and aerospace and miscellaneous transportation equipment.” That’s good news.

While China’s economic growth reportedly slowed to 8.9% in the fourth quarter of 2011, down from 9.1% growth in Q3, markets took the news in stride as many analysts continue to look for a soft landing in China. The World Bank, in its latest forecasts released this week, is predicting that real GDP in China will increase 8.4% this year, while global GDP is only expected to expand 2.5%. While noting that a number of price-boom conditions for commodities are still in place,including relatively high energy prices, low interest rates, rising fund investment and expanding industrial production, the World Bank has a negative medium term outlook for commodities, with non-oil commodity prices forecast to fall 9% in 2012, including a 6% drop in metals and mineral prices. As concerns about Europe’s debt crisis intensify, the World Bank is forecasting that, after having expanded 6.6% in 2011, world trade will grow by 4.7% in 2012.

Scrap Exports… 
As a follow-up to the trade figures presented in last week’s report, Jan-Nov 2011 net exports of scrap

(exports – imports) from the U.S. totaled more than $30 billion, up from full year 2010 net exports of over

$24 billion and a remarkable increase from around $3.5 billion just ten years ago. Over the course of the

last decade, Census figures show total scrap exports totaled around $185 billion and net exports provided

a boost to our balance of trade to the tune of around $145 billion. We’ll provide more info once the full

year 2011 numbers are out, but here’s the picture since 1989, with positive net scrap exports for all years:


Ferrous…

Ferrous scrap exports from the U.S. advanced in November to 1.9 million mt, up from 1.75 million mt in October, and increased in value to over $820 million according to the latest Census Bureau figures. Cumulative ferrous scrap exports during Jan-Nov 2011 surged 44% higher by volume to $9.75 billion, already breaking the full year record of $9.2 billion set in 2008 and well on track to surpass the $10 billion mark for the first time. By volume, Jan-Nov ferrous scrap loadings were up around 23% to 22 million mt. The top 5 destinations by value during the first 11 months of 2011 were as follows: Turkey ($2.2 billion); China (nearly $2.0 billion), Taiwan ($1.3 billion); South Korea ($1.2 billion) and India (over $440 million). Here’s the cumulative breakdown by volume and grade, note the 48% surge in No. 1 HMS shipments:

As far as domestic consumption goes, the U.S. Geological Survey recently reported that U.S. iron and steel scrap consumption during Jan-Sep 2011 increased to 41.6 million mt, up around 10% from the corresponding period in 2010. This week, reports continued to circulate of bearish scrap price expectations for February. As of early this week, Scrap Price Bulletin was listing steady composite prices for No. 1 HMS and shredded at $432.50/gt and $473.83/gt, respectively. Late in the week, The Steel Index reduced its reduced its reference price for shredded to $469/lt delivered Midwest while noting

“Good US scrap flows.”

Nonferrous…

Copper and copper alloy scrap export shipments from the U.S. also rebounded in November according to Census Bureau figures, improving in value to nearly $383 million and by volume to around 103,000 mt for the month. For the Jan-Nov 2011 period, copper scrap exports jumped 45% higher to over $4.6 billion. The sharp increase largely reflects a 50% spike in copper scrap shipments to China, which increased to $3.2 billion during Jan-Nov, an increase of more than $1 billion over the same period in 2010. The increase not only results from higher scrap prices, but also from increased volumes, with U.S. copper scrap exports to China up 25% through November to approximately 864,000 mt. With the exception of lead, nonferrous scrap exports from the U.S. posted significant gains during Jan-Nov 2011:

Aluminum scrap exports were up 12% by volume during Jan-Nov but jumped 29% by value to $3.7 billion, including a 75% surge in the value of UBC scrap shipments. Secondary aluminum prices were reportedly a little firmer this week, with old sheet and cast mostly indicated in the 68-72 cent range, siding around 70 cents and MLC in the low to mid 70’s. Copper scrap spreads reportedly moved out a little, with Platts listing Bare Bright at 10 cents under COMEX, burnt No. 1 at 25 cents under and No. 2 at 38 cents under, while AMM was listing brass ingot makers’ prices for radiators and yellow brass solids at 225-228 cents.

Recovered Paper and Fiber…

Rounding out our scrap export coverage this week (we’ll take a look at plastic scrap exports next week), recovered paper shipments from the U.S. eased by volume to around 1.8 million short tons and by value to $290 million, down from $320 million in October as somewhat weaker overseas demand reportedly contributed to falling recovered paper and fiber prices late last year. RP shipments to China dropped around 6% for the month of November, including a significant (-13%) drop in OCC loadings. But over the course of Jan-Nov 2011, total recovered paper and fiber exports were up 12% by volume to more than 21million st and 16% by value to approach $3.5 billion. Here’s the recent trend in monthly shipments:

Webinar Follow-Up…
Thanks very much to our three excellent speakers from yesterday’s webinar on the outlook for commodities in 2012: William Adams of Fastmarkets Ltd, Greg Rudder of RISI’s PPI Pulp and PaperWeek, and Pat McCormick of World Steel Dynamics. Thanks also to the ISRI organizers and all who participated. We had close to 90 registered participants for the webinar and we will keep you posted on future commodity-focused ISRI webinars in this space.

This Week’s Quote: “We sleep in separate rooms, we have dinner apart, we take separate vacations -we're doing everything we can to keep our marriage together.” -- Rodney Dangerfield

This Week’s Story: A pregnant woman from Washington, D.C. gets into a car accident and falls into a deep coma. Unconscious for nearly 1 month, when she wakes up she sees that she is no longer pregnant and frantically asks the doctor about her baby.

The doctor replies, "Ma'am you had twins! A healthy boy and a girl. Your brother from Maryland came in and named them."