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Metal Market Report | February 2017

Ferrous:

February started the month with a very bearish tone for ferrous, giving domestic mills an opportunity to lower scrap prices due to silent export markets. Turkey entered the market late Feb 7th with 3% higher offerings causing the weakened East Coast market to quickly firm. The Asian markets remain weaker than current U.S. domestic prices therefore increasing the domestic mill’s leverage in the West.

 

The domestic mills had settled most of their February trades at lower levels before the February 7th Turkish orders were placed. Along the west coast, prices fell $15 in February leaving a lot of questions for March, but many believe this adjustment will be returned next month. We feel the market could correct itself in March, returning to January levels, so we are only decreasing our buying prices buy $10 this month.

 

Mill orders are strong and prices are stable leaving many to wonder why the market fell in the first place? The answer: because it could! Domestic mills saw a small window to double dip from the market; they charge higher prices on their new steel products while lowering their scrap costs only further padding their pockets.

 

Overall the market sentiment for 2017 is betting that scrap price averages will be higher this year compared to 2016 levels.  Global demand is also expected to increase throughout 2017 brought on by rigorous activity in the construction sector which remains the predominant consumer of steel.  Chinese steel demand increased in 2016, however suppliers outside of China are expected to play a larger role in the 2017 market.

 

Non-ferrous:

Copper prices made small gains during January and forecasters believe they are poised to move slightly higher as a major mine strike in Chile looks likely. A weakening dollar could also cause the red metal to remain firm or make modest gains in the coming weeks. Aluminum also saw some modest gains in January motivated by the softer tone of the dollar and an increase in automotive applications. A significant rebound in stainless steel demand pushed the global nickel market into the green after 4 years of surplus and price weakness. Unfortunately over the past few months, nickel prices have taken a downward trend although still up 17% year-over-year. Lead prices remained flat over the past 30 days while Zinc prices continued their momentous climb, up 80% from levels seen in January 2016.   Precious metals made some modest gains in January mostly benefiting from the before mentioned softer dollar while crude remained flat over the past 30 days but has rebounded sharply from this time last year.

As of October 12, 2016 % Change
COMMODITIES  September Ave. 30 Day Change (January) 6 Month Change 12 Month change
Copper Comex ($/LB) $         2.61 2.0 22.0 29.9
Aluminum ($/LB) – LME  $         0.80 1.9 8.1 19.4
Nickel ($/LB) – LME  $         4.52 -9.4 -3.8 17.4
Lead ($/LB) – LME  $         1.01 .3 22.2 35.2
Zinc ($/LB) – LME  $         1.23 4.3 22.2 75.4
Gold (LB/OZ)  $  1,193.00 3.6 -10.8 8.8
Silver ($/OZ)  $       16.89 2.9 -13.4 20.0
Crude Oil ($)  $       52.63 -0.9 17.5 65.6
Jan\Feb Change 6 Month Change 12 Month Change
Scrap Steel Prices – No. 1 Heavy Melt (Intermountain west) -8.0 12.3 33.1

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