Monday, March 30, 2015

Metal Commodities and Recycling Report, March 30th, Raleigh Scrap Metal Recycling, 2310 Garner Rd, Raleigh, NC, 27610, 919-828-5426

Raleigh Metal Recycling 
Metal Commodities and Recycling Report
March 30th, 2015 
2310 Garner Road
Raleigh, NC, 27610

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.

metal commodities recycling report
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.

metal commodities recycling report
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. 

metal commodities recycling report
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.

metal recycling commodities report
AMM - Aluminum Prices Report

Oil remains a mixed news story.  The oil and gas drilling rig count continues to decline in the United States.

metal commodities recycling report
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.

With that we hope all have a Safe and Profitable week.   Tune in next week for the Monday Commodity and Recycling report.