The early July steel mill buying period did little to interrupt what has been a stable market for ferrous scrap through most of 2017. A growing cause of headaches for some recyclers, however, has been a shortage of railcars to fill orders.

On the pricing front, the Midwest indices calculated by American Metal Market (AMM) to reflect early July domestic mill buying showed a flat market for shredded scrap and No. 1 heavy melting steel (HMS) and a $10 per ton downward turn for prompt scrap.

AMM Midwest Scrap Index, No. 1 Busheling (blue circles): All prices are effective the 10th of the month or the following Monday if the 10th falls on the weekend. RMDAS Ferrous Scrap Price Index (black squares): Per gross ton for No. 2 shredded scrap, defined as 0.17 percent or greater copper content, effective the 20th of each respective buy month.

The publication’s export indices for July revealed a split personality, with East Coast buyers paying some $25-per-ton more for HMS scrap, while pricing on the West Coast declined by nearly $10 per ton.

A recycler in the Great Lakes region describes domestic mill buys for July as in the normal range, except for one large electric arc furnace (EAF) mill that intended to reduce its monthly shred purchases compared with the preceding two months.

The same recycler described the inbound scrap supply situation in the early summer as “a nice steady flow, and everyone is busy.” The troubling aspect of the ferrous sector in 2017 has not involved supply or demand but rather the transportation link in between.

“The single biggest obstacle we all face right now is a shortage of railcars,” the recycler says of his company and other scrap processors in his region. “It has been absolutely brutal.”

The problem is not a new one, he says, and it has been getting worse throughout 2017. “Railcars have been an issue for the scrap industry most of the year across all regions, [and] the last 30 to 60 days, we have been hit particularly hard,” he comments in early July.

“People I’ve talked to all over the United States are encountering the same shortage, but the Midwest seems to have been affected the most,” the recycler says of the overall situation.

Better news in the summer of 2017 appears to be arising in the East Coast region, where overseas mill buyers are providing competitive bids for material that can be delivered to Atlantic Coast ports.

AMM reported on several major buys from Turkish mills in early July, transactions that reflect the rebounding health of the overall Turkish steel industry.

The Turkish Steel Producers Association (TCÜD) has announced an 11.5 percent boost in Turkey’s steel output in 2017 compared with the year before.

According to an online report from the Istanbul-based Hürriyet Daily News, the TCÜD says Turkey’s crude steel production rose 11.5 percent in the first five months of 2017 compared with the same period in 2016. Turkey produced 15.1 million metric tons of steel from January to May 2017, according to the TCÜD.

The TCÜD passed the figures on to Brussels-based World Steel Association (WorldSteel), which lists Turkey as the world’s eighth-largest crude steel producer so far in 2017, behind only Russia and Germany in Europe.

According to the Hürriyet article, Turkey’s steel export volume rose by 22.5 percent in the first five months of 2017 compared with a year earlier, reaching 8.5 million metric tons.

Steel imports into Turkey, on the other hand, fell by 20.3 percent in early 2017 compared with the prior year, dropping to 6.4 million metric tons.

Turkey’s internal consumption of steel has fallen by 10.3 percent year on year (to 12.22 million tons), meaning the export market is supporting the rise in output so far in 2017.

Closer to home, as of early July, the steel and ferrous scrap industries were still waiting to see whether the Trump administration would take measures to limit or enact steep tariffs on certain types of imported steel. Whether such measures are targeted toward Canada or Mexico is shaping up as one concern.

Thomas J. Gibson, president and CEO of the Washington-based American Iron and Steel Institute (AISI), says the steel industry sees the North American Free Trade Agreement (NAFTA) as a generally successful pact but adds that it can be modernized and strengthened.

In testimony in late June 2017 before an interagency hearing of the U.S. Trade Representative (USTR) on NAFTA modernization, Gibson said NAFTA has “strengthened manufacturing supply chains, contributed to increases in intra-NAFTA trade and investment and enabled a stronger relationship with Canada and Mexico” for the steel industry.

“NAFTA is the steel industry’s most important free trade agreement, as 90 percent of all U.S. steel mill product exports are to Canada and Mexico,” Gibson remarked. He added, “Since NAFTA went into force, U.S. steel exports to Canada and Mexico increased nearly threefold, and the United States moved from a large steel trade deficit with Canada and Mexico to a relatively balanced trade relationship.”

Additional RMDAS (Raw Material Data Aggregation Service) pricing from Pittsburgh-based Management Science Associates (MSA) is available on the Recycling Today website at

The American Metal Market (AMM) Midwest Ferrous Scrap Index is calculated based on transaction data received that are then tonnage-weighted and normalized to produce a final index value. The AMM Scrap Index includes material that will be delivered within 30 days to the mill. Spot business included after the 10th of the month will not be included. The AMM Ferrous Scrap Export Indices are calculated based on transaction data received that are then tonnage-weighted and normalized to produce a final index value. The detailed methodology is available at *FOB New York, in metric tons; **FOB Los Angeles, in metric tons.