SJF Material Handling Blog

DJJ head says scrap prices could strengthen in coming months

After falling in the second quarter, scrap prices appear to have temporarily bottomed and may even be heading upward, according to Keith Grass, CEO of Nucor’s scrap unit, David J Joseph (DJJ).

Speaking during a quarterly earnings call yesterday, Grass said flows into company scrap yards appear to have declined 25 to 30%. Inquiries from the export market have picked up, he said, something that had been absent for the last 30-45 days.

Courtesy: Steel Business Briefing

Steel Dynamics Inc CEO Keith Busse doesn’t believe US scrap prices will be up in August, he told investors and analysts yesterday on a quarterly conference call monitored by Steel Business Briefing.

Due to a weak export picture and declining steel prices, he said “you’re not going to see any strength in August in ferrous resources.” However, Busse said he believed prices could begin to rise by early September. He added he’s not sure by how much, but doubted they could increase by $20-30/long ton, as some in the market have speculated.

Source: Steel Business Briefing

Declining scrap prices are expected to drag down US longs prices with them, Steel Business Briefing understands.

A source at one domestic beams producer predicted yesterday that prices for delivery of that product next month would fall along with the decline in scrap by $20-40/short ton.

Source: Steel Business Briefing

August US scrap surcharge benchmark down $45/l.ton

A key scrap price that determines surcharges for August deliveries of many steel products in the US market fell by $45 - from $350 to $305 per long ton, Steel Business Briefing learns.

As SBB has previously reported, scrap market players had been expecting a drop in scrap prices due to especially weak export demand.

Source: Business Briefing

The U.S gov’t last month imposed large tariffs of 42.61% to 289% charging the Chinese were dumping wire decks in the US.market.

Response : Government puts tariffs on imported wire but at who’s expense?

Government intervention into the free markets has a dismal & destructive track record.
Nobody ever wins a trade war.  Call it what you will, price controls, tariffs, import taxes, price freezes etc.

Always instituted for ” noble reasons” yet, in reality,  they’re just another means for government to justify picking winners and losers in the marketplace.

Tariffs will result in retaliation from the other side.  This is nothing new.  This is how trade wars start.

China will now retaliate with some measure of their own and the industries that feel the brunt of that retaliation then must suffer for no fault of their own.

In the end nobody wins and business suffers.  What do you think?

Introducing RSS

What is RSS?

RSS stands for “Really Simple Syndication”. At it’s most basic form, it’s a standard for distributing content to a wide number of people quickly and easily.

Why should I care?

Most web users who are interested in many sites or topics must repeatedly visit each individual site they follow.  These sites are updated at random and can often require daily visits to stay on top of the most recent updates.  This can become very tedious.

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LONDON (MarketWatch) — European trade groups Eurofer, which represents steelmakers, and Orgalime, which represents industrial firms, said they “condemn” attempts by iron-ore producers BHP Billiton, Rio Tinto and Vale to increase prices by 80% or more. Vale this week reached a deal with Japanese steelmakers to up prices by 90%. The trade groups said the miners already have profit margins of up 50% per metric ton and that the price increases may place in jeopardy the fragile recovery of the manufacturing industry.

March’s US scrap market could be “coming in like a lion” with strong prices, one Mid-Atlantic states scrap dealer tells Steel Business Briefing.

“By all accounts the mills have strong order books, and are projecting good business. On the other side, incoming scrap has been severely impacted by the weather, as has transportation, especially rail service. The result will be an up market for scrap-probably a significant ‘up,’” he believes.

Should you cut your prices to increase sales  during a recession?

Let’s Check the Math

FACT:: If you cut prices by 20%, you have to sell 25% more units just to maintain revenue(break even).

During good times, a 25% increase in sales volume is asking a lot.  In a recession, the math says it’s self induced suicide for almost all who try.

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The US government slapped preliminary anti-dumping duties on imports of more than 300 million dollars worth of wire decking from China, the Commerce Department said in a statement on Tuesday.

The department claimed that it found dumping of wire decking from China after investigation. The tariffs of between 42.61 to 289 percent will be imposed and collected until a final determination is made in the case.

Wire decking reinforced with structural supports is designed generally for industrial and other commercial storage rack systems.

The United States has imposed duties on a variety of Chinese goods including steel pipes, grating and tubular goods based on other investigations.

The wire decking anti-dumping case is another move that might escalate trade disputes between the two major trade players in the world.

Source: Xinhua