Although prime scrap grades gained yet more value in the July buying period, the parade of obsolete scrap flowing into yards seems to have helped the supply of other ferrous scrap grades catch up with demand.

Fastmarkets AMM July export and Midwest Scrap Index pricing shows overseas buyers were unwilling to raise their bids for scrap from the U.S. Domestic buyers, meanwhile, had to pay yet another $20 per ton for prime, prompt scrap, but the prices for shredded and No. 1 heavy melting steel, or HMS, were flat.

While the July prices did not rise, the fact that they simply held their value for another 30 days seemingly put scrap processors in a good mood.

“It’s been a good 12 months and a fantastic first half of 2021,” says a scrap processor on the East Coast. “With very strong ferrous and nonferrous prices, we have been able to expand margins, and pre-COVID volumes are returning,” he adds.

“With very strong ferrous and nonferrous prices, we have been able to expand margins, and pre-COVID volumes are returning.” – an East Coast scrap processor

Although export prices might not be soaring, the ongoing overseas demand has its benefits, the processor says. “Strong container markets with prepaid and CAD [cash against documents via bank] terms have been great for cash flow to finance 30- to 45-day term shipments in the domestic market,” he says.

The processor says his company invested in its shredder downstream system two years ago, which has paid off nicely, along with the zorba price “going up 150 percent from pre-COVID,” he adds. “We are feeling good about the coming year and beyond.”

The high-priced ferrous scrap market continues to be linked to national and global demand for finished steel. Weekly steel production figures from the Washington-based American Iron and Steel Institute (AISI) demonstrate a rebound from darker COVID-affected days last year.

Year-to-date domestic steel output through July 10 stands at more than 48.7 million tons, with a mill capability utilization (capacity) rate of 79.2 percent. That is up 16.7 percent from the 41.7 million tons made during the same period last year, when the capacity rate was 66.7 percent, AISI reports.

Globally through the month of May, crude steel production for the 64 countries reporting to the Brussels-based World Steel Association checked in at 837.5 million metric tons. That represents a 14.5 percent increase over the amount of steel produced through May of 2020.


Global output in the month of May rose 16.5 percent compared with May 2020. Steel production in Europe, the Americas and Africa increased by 33 percent to 65 percent compared with May 2020, when restrictions in many nations were at their most stringent points.

Through May, steelmakers in Turkey have produced 21.2 percent more steel than they did in the first five months of 2020, while steelmakers in India have churned out 33.6 percent more product. The two nations provide steady export markets for American ferrous scrap processors.

Securing supply, making shipping arrangements and managing risk remain management tasks for processors and traders who may otherwise be pleased with the buoyant market.

In terms of supply securement, Peru-based electric arc furnace (EAF) steelmaker Aceros Arequipa made a move in July to tap into the U.S. scrap market to supply its mill in South America.

Aceros Arequipa announced it has agreed to purchase an auto shredder yard in Florida formerly operated by Topsham, Maine-based Grimmel Industries. The Peruvian steelmaker also will acquire a second Grimmel yard in St. Petersburg, Florida, as part of the transaction.

The firm’s announcement states in part, “Among the main assets acquired are two 116,000-square-meter (1.25 million-square-foot) yards, a 6,000-horsepower and 450 rpm shredder, as well as a magnetic metal separator that will allow the segregation of nonferrous material for export mainly to Asia.”

The EAF steelmaker says it expects to supply itself with 100,000 tons of ferrous scrap per year from the Florida operations, “reinforcing the supply of recycled steel” for its upgraded EAF melt shop in Pisco, Peru.

Freight woes and hedging were discussed at a ferrous scrap roundtable in late June during the International Recycling Week online event.

While soaring freight rates have been the topic of frequent complaints in late 2020 and into 2021, Ved Prakash of Belgium-based secondary commodities trading firm Gemini Corp. said the global rise in sea freight rates has not imposed an undue burden on Gemini, even though it ships some 130,000 containers each year.

“The logistic cost percentage of [a transaction] price is usually around 20 percent,” he said. Despite the rising freight rates, that margin “is still the same” as of mid-2021, he said, since scrap prices also have moved up.