Scrap processors and traders who were ready for a price rebound in the early autumn months were largely disappointed as the tepid pricing that has marked 2016 continued into September and October.
European recyclers benefitted more than those in North America did from the rebound in Turkish buying that followed a down period that coincided with the coup attempt in that nation. While the U.S. dollar remained strong in the autumn months, the British pound plunged to historic lows.
Writing in the October 2016 Bureau of International Recycling (BIR) World Mirror: Ferrous, Tom Bird of United Kingdom-based Liberty Metals Recycling comments, “Exchange rates have played a major role in determining price levels at an EU domestic level. This has been particularly important with regard to the U.K. as the continued uncertainty over Brexit has led to a great deal of volatility. It should be noted that activity in the container market has been driven by the continued weakness of [the British pound] against the U.S. dollar.”
For recyclers in the United States, pricing remained depressed in September and October, and a lack of overseas buyers was one of the culprits. Also writing for the World Mirror, George Adams of USA-based SA Recycling remarks, “A weakening domestic market as well as a soft export market left mills in a position to drop prices as scrap dealers entered September negotiations.”
The strong dollar has been so persistent that some U.S. mills have begun shopping for scrap overseas, Adams writes. “After the attempted coup in Turkey, demand and prices from the largest U.S. consumer of exported scrap have decreased. A strong dollar has also allowed U.S. mills to bring in cheaper European scrap,” he states.
The temporary effect of the Turkish coup attempt can be seen in U.S. export figures gathered by that nation’s Department of Commerce and republished by the United States Geological Survey (USGS).
In June 2016 just 88,000 tonnes of ferrous scrap departed the U.S. for Turkey, representing about 24% of the 369,000 tonnes that was shipped in June 2015. That 88,000 tonnes also is just 19% of the 463,000 tonnes shipped from the U.S. to Turkey in December 2015.
Charles Bradford of New York-based Bradford Research, who spoke in Chicago at the Institute of Scrap Recycling Industries (ISRI) Commodities Roundtables 2016 in September, said the flow of ferrous scrap from the U.S. to Turkey has declined appreciably this year, despite Turkey (pre- and postcoup) experiencing an increase in overall ferrous scrap imports. He cited the strength of the U.S. dollar as a key reason.