IAR Recyclers Newspress July / August 2015

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Metal Market Recovery Next Quarter?
July / August 2015 Iowa Auto Recyclers
Inside this issue:
When will the steel scrap market
recover? This is the biggest issue facing
our industry today. The crash of the steel
scrap market has put tremendous pres-
sure on automotive recyclers. In this arti-
cle we’ll attempt to gain an understanding
of the complex puzzle that makes up the
steel scrap supply and demand curve. But
first we must ask: Why did steel and steel
scrap prices fall sharply?
Steel is a cyclical industry with its fortunes
tied to several macroeconomic factors.
There are several indicators domestic and
global that investors, like U.S. Steel or
Nucor, track according to author Mark
O’Hara’s fifteen part article on the steel
industry published recently at marketreal-
1.
Understanding the demand for steel
through consumer trends will help to pre-
dict when the metal market will be on the
road to recovery. But first we must under-
stand the supply side of the market in or-
der to gain the patience needed to ride out
the tsunami of low steel scrap prices.
Steel prices in the United States fell by
over 10% in 2014 and steel scrap fell by
about 20%. Steel is one of the world’s
most important materials used in construc-
tion, cars and all sorts of machines and
appliances. By far the biggest producer of
crude steel is China, followed by Europe-
an Union, Japan, United States, India,
Russia and South Korea. The biggest pro-
ducers of iron ore are: China, Australia,
Brazil, India, Russia, Ukraine and South
Africa. Steel Futures are traded on the
London Metal Exchange (LME).
.
Summer Outing Recap