Wilson Metal Recycling
Metal Commodities and Recycling Report
March 25th, 2015
404 Maury St S
Wilson, NC, 27893
252-243-3586
This
is the Monday Commodities and Recycling report, brought to you by BENLEE the industry
leader in roll off trailers and open top scrap trailers, as well as Raleigh and
Goldsboro Metal Recycling, the leaders in North Carolina for Scrap Metal,
Cardboard, Electronics and Junk Cars.
Today
is Monday, March 30th, 2015.
My name is Greg Brown, President and CEO of the companies.
It
was a quiet week in the markets, other than last Monday
Late
afternoon last Monday, copper jumped 10 cents on COMEX and stayed there for a
number of hours. Other than that, copper
started and ended the week the same way it started, about $2.78 per pound. On the negative side of copper, sadly copper
and copper alloy scrap exports were down 25 percent this January, year over
year. Pic
Also,
some will say Copper is a key global economic indicator. For many years, copper has been called either
Dr. Metal, or the metal with a PhD. The
Dr. name is due to many say, the health of the economy can be determined by the
price of copper. The PhD name is for
PhDs are smart, so they know what is going on, meaning the price of copper is
an indication of the strength of the economy.
Put together, things are ok, but not great. Copper was about 68% higher in April of 2011,
versus today. It was $4.66 per pound in
April 2011 and $2.78 today.
 |
| CME Group - Copper Prices Graph |
As
for steel, for those that missed last week’s report, it’s worth mentioning that
about 10 days ago, Steel Dynamics which owns OmniSource the nation’s second
largest recycler of metals, issued a profit warning to Wall Street. They said profits were going to be lower than
all had been expecting. The flood of
finished steel coming into the United States from overseas, lower volumes and
the lower prices of scrap metal, were the stated reasons. It was also stated that they would lose money
this quarter in Recycling. Nucor Steel,
the second largest steel producer in the United States also issued a profit
warning. They gave the same two reasons
as Steel Dynamics and said that their recycling operations would have declining
profits.
Related
last week there were various meetings in Washington DC with U.S. Senators, the Secretary
of Commerce and the U.S Trade representative, to discuss possible dumping of
steel into the U.S. from other countries below cost. As part of this, the President of U.S. Steel
has called for congress to act on what he says are these unfair trade practices.
Also,
with the new month, steel prices may change this week. Some say the move could be sideways and there
are indications that some prices could be up.
A key issue is, shred feed remains very scarce, due to very low inflows
of obsolete scrap.
 |
| AMM - Steel Production Graph |
On
the positive side, after a huge drop in US steel production, we are now seeing
a small increase in production levels.
With
that, scrap metal prices remain at their multi year low.
 |
| AMM - Scrap Metal Prices Graph |
Aluminum
after quite the drop in the past year has stabilized and saw some increases
last week. Many feel very good about the
price of Aluminum, as the new Ford F 150 ramps up with its all-aluminum
exterior. Related there is word on the
street that Chrysler is about to follow with aluminum exteriors.
 |
| AMM - Aluminum Prices Graph |
Oil
remains a mixed news story. The oil and
gas drilling rig count continues to decline in the United States.
 |
| Market Realist - Oil Rig Count Graph |
Orders
continue to slow down with steel mills making less steel for drilling
rigs. On the positive side as we
continue to say, with prices of fuel remaining low, it is starting to have a
positive effect on many parts of the economy as people and companies have more
money in their pocket.
As
for the recycling industry, there is no good news. Volumes remain low, with margins going up a
bit, not due to less competitive pressure, but due to pure math; as prices go
down, margin percent goes up. In reality
though, with volumes down, profits are down.
There
were no changes in our scrap metal prices last week in North Carolina, with our
Raleigh prices of #1 copper being $2.20 per pound, but could go up this
week. Prepared Steel is still being
purchased for $6.25 per hundred pounds.
Lastly,
our best wished to Jim Lawrence, in his new role at AMM.
