At the start of January, scrap suppliers were optimistic. Many experts expected February ferrous scrap prices to rise another $10–$20 per gross ton, marking a third straight month of increases.
Then winter hit — hard.
Beginning January 19, two major Arctic storms swept across more than 40 states, stretching over 2,000 miles. The extreme cold, snow, and ice caused major disruptions:
Looking ahead, suppliers may not get much help from export markets. Turkish mills — a key buyer — are currently facing weak steel demand and tight margins due to high scrap costs.
As the weather improves, scrap flows are expected to increase sharply. If supply rebounds quickly, domestic steel mills may try to push prices back down after February’s increases.
The non-ferrous markets have been extremely volatile over the past 30 days.
Even though global economic data has been soft — with many (PMI) readings below 50 (a sign of contraction) — the U.S. manufacturing PMI unexpectedly rose from 45.8 in December to 51.6 in January. That marks the first expansion reading in 12 months.
Copper prices remain historically high and highly volatile. Combined with large price swings in the futures markets, many buyers are staying cautious — purchasing only what they need for immediate production.
High copper prices are being driven by:
However, some respected market analysts believe copper prices are being driven more by speculation than true economic fundamentals.
Aluminum has also seen major price swings.
The Midwest premium hit a record $1.04 per pound, before settling at $1.02 last week.
Scrap aluminum prices remain strong due to:
Still, many fabricators are buying only what they absolutely need.
Nickel has experienced dramatic daily swings — moving as much as $1,330 per metric ton in a single day — before ending the month down $385 per metric ton overall.
There continues to be a disconnect between LME nickel prices and stainless steel scrap prices. Demand from domestic stainless steel mills remains weak.
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