Materials Outlook For Scrap Metal Supply

By Tony Lewis

Global demand for scrap metal continues to rise.
Global demand for scrap metal continues to rise.

Waupaca continuously monitors global demand for scrap metal, paying particularly close attention to rates for No. 1 Heavy Melt and Shredded scrap—two main ingredients in our gray iron. Sources reported a year over year (1/2010-9/2010 vs. 1/2011-9/2011) four-million-ton-plus increase in the exporting of U.S. scrap metal, primarily to China, Taiwan and Turkey. The equivalent of a 28 percent increase from one-year prior, this high demand in the export market has taken its toll on materials prices and surcharges.*

You see, as the U.S. exports higher percentages of scrap metal, less is available for domestic use, resulting in greater materials costs for foundries and rising surcharges for customers. Because the scrap metal market is so volatile, it is difficult to predict where prices will land through the coming year. Increases and decreases of up to $30 per ton are common from month to month.

So, with our strong supplier relationships we will continue to avoid material shortages, allowing us to keep up with customer demand.

*Source: Compiled by AAM from data released by the U.S. Commerce Department.