As has been the case for some time in the nonferrous metals sector, scrap supply continues to outpace demand.

A processor based in the Midwest says billet makers’ demand for aluminum scrap has increased and that mills are always in the market for No. 1 copper and bare bright. Even mill demand for stainless steel scrap is strong, he says, especially when compared with the start of the year. “I think there is demand; there’s just more scrap than mill demand,” the processor says of nonferrous scrap markets overall.

He adds that it’s still common for deliveries of copper and aluminum scrap to be pushed out for one month.

*Average monthly settlement price, cash buyer; U.S. dollars per metric ton. Source: London Metal Exchange, www.lme.com.

Generation of prime and obsolete scrap has been quite robust, he says, thanks to strength in the industrial and demolition sectors. He adds that his company also has seen an uptick in retail scrap trade as well, as is expected in the summer. “A lot of obsolete scrap is coming in.”

Pricing for aluminum, copper and stainless all have dipped, the source says, though he attributes that more to hedge fund activity than to the forces of supply and demand. “Supply and demand doesn’t move these markets anymore.”

While his company sells much of its copper and brass scrap directly to domestic mills, it also sells some copper scrap overseas through U.S.-based brokers. He says this approach helps to insulate his company from issues related to CCIC (China Certification & Inspection Group) inspections as well as from issues surrounding booking and drayage.

He describes the situation with transportation as “getting worse,” noting the shortage of drivers and the electronic logging requirements as the primary factors affecting the trucking industry.

“Supply and demand doesn’t move these markets anymore.” – a scrap processor based in the Midwest

Electronic logging is congressionally mandated under MAP-21—Moving Ahead for Progress in the 21st Century—Act, which was signed into law by then-President Obama July 6, 2012. It is intended to help create a safer work environment for drivers and to facilitate accurate tracking, managing and sharing of records of duty status data. Electronic logging devices synchronize with vehicles’ engines to automatically record driving time for easier, more accurate hours of service recording.

The combination of factors affecting the trucking sector has made carriers more selective. “Carriers are picking and choosing what they want to haul and who they want to haul from,” the processor says.

In response to the situation in the commercial trucking sector, the processor says his company is attempting to expand its own trucking fleet. However, it’s also encountering difficulty finding drivers. He says his company is paying more per hour and offering more incentives “than we would like” to attract drivers.

Finding labor more generally also has been an issue, the processor says, given the low unemployment rate in his area and the incidence of opioid abuse. He says his company previously relied on temporary employment services to fill these positions, but the candidates available through them are “almost unemployable.” As a result, the processor says his company is ramping up its human resources department and doing more recruiting.