Toronto, Ontario -- March 9, 2016 -- Good news for automotive recyclers: there’s been an unexpected upturn in ferrous scrap prices recently. A number of experts have weighed in on whether the price bump will last.
The price increase is quite recent and follows numbers in January that showed a decline in world steel production. Producing high-quality new steel requires ferrous scrap and is in fact one of the largest markets for the material. According to the World Steel Association, worldwide production of steel in January 2016 was just 127.724 million tonnes. This is considerably lower than the 137.518 million tonnes of steel produced globally in January 2015.
According to a report in Recycling International, the uptick in prices reflects both “higher Chinese billet prices and restricted flows of scrap.” Recycling International also reports that the indications so far in March show higher prices for ferrous scrap on the domestic market. The North American prise rise is “attributed to a combination of low scrap availability among dealers and rising US steelmaking capacity utilisation.”
According to Statistics Canada, the Raw Materials Price Index (RMPI) declined by 0.4 percent in January, with lower prices for crude energy products moderating the gains made by metal ores, concentrates and scrap.
In total, the RMPI declined by 7.5 percent over the 12 months ending in January 2016. Part of the reason for that decline are lowered overall prices for metal ores, concentrates and scrap, which fell by 10 percent since January 2015.