Scrap Metal

We have all had the experience of sitting in a cinema seat or on a bus or train and finding a stray coin, haven’t we?

One day when coins are replaced by plastic or inflation forces us to only use notes, the metal coin will be a thing of distant memory, but for now they remain part of everyday life and try as we might, some of them get away from us!

Well, cinema and bus cleaners may have more perks than free viewings and bus passes if a story in the BBC is anything to go by. It seems we probably lose more money every time we sit down than we thought. I know my car is periodically showered with change when I hop in too quickly and it would seem I am not alone in losing a proportion of my personal wealth every time I drive.

Here’s how the Chinese capitalize on that.

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One cannot miss the irony of the fact behind the headline. An international diversified metals and mining company built from the ground up by an Indian, finding it tough to do business in India.

The Indian story of Vedanta Resources, whose resources and assets are spread across India, Zambia, Namibia, South Africa, Australia, Liberia and Ireland, is not unfolding the way it was perhaps scripted in the minds of its chairman, Anil Agarwal.

Agarwal’s story is a typical rags-to-riches tale. From a scrap dealer in a dusty town in Northern India over three decades ago, Agarwal today heads a nearly US $11 billion (in revenue) group, headquartered in London, and part of the FTSE 100 index – the only Indian company to enjoy that distinction today.

Vedanta Group companies are into every kind of geological extraction and metal business – coal, gas, bauxite, aluminum, oil, zinc, copper, and iron ore.

Pretty good show for a scrap metal dealer.

But Agarwal may be a tad disappointed with the way his company’s India story has been unfolding, and occasionally interviews and statements in the Indian press reflect that sometimes.

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For those of you steel industry observers, nothing has appeared as dramatic as the June price drops for steel scrap.

So we note with interest the latest trends involving steel imports as reported by the International Trade Administration and their impact on both domestic steel pricing as well as the future of steel prices for the balance of this year and into next year.

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I can’t speak for all Chicagoans, but I have always enjoyed Cloud Gate, or “The Bean,” a stainless steel structure that has graced our city landscape for six years now and provided some clever photo opportunities.

To me, it is engaging and playful — a mirrored cultural marvel that distorts, pools, and paints our city skyline in a way that no other structure has done before. Plus, the metal nerd in me appreciates that it is a 110-ton elliptical sculpture forged from 168 seamless stainless steel plates and polished to perfection so there are no visible seams on the exterior.

Image source: mypage.iu.edu

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The Chinese primary aluminum cash price saw a 0.6 percent increase on May 3, 2012, reaching CNY 16,200 ($2,581) per metric ton on the SHFE and making it the biggest mover for the day on aluminum markets.

The price of Chinese aluminum bar saw essentially no change for the fifth day in a row, remaining above $2,200 per metric ton. The price of Chinese aluminum billet remained essentially flat, below $2,600 per metric ton. For the fifth day in a row, the price of Chinese aluminum scrap remained essentially flat above $2,600 per metric ton.

The price of Indian aluminum primary declined 0.5 percent. The LME cash price of primary aluminum declined 0.1 percent to $2,064 per metric ton. Also on the LME, the 3-month price of primary aluminum showed little movement on Thursday, hovering around $2,107 per metric ton.

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Dropping 0.9 percent on the LME, the nickel 3-month price showed the most movement on May 3, 2012, closing at $17,470 per metric ton. The primary nickel price weakened by 0.5 percent on the LME, settling at $17,430 per metric ton. The Indian primary nickel cash price finished the market day up 0.3 percent. The price of Chinese primary nickel saw a 0.8 percent decline.

Chinese stainless steel closed mixed yesterday. The price of Chinese ferro-chrome was unchanged, remaining above $1,300 per metric ton. The price of Chinese ferro-moly continues hovering above $23,000 per metric ton for the fifth day in a row.

The price of Chinese 304 stainless coil increased 0.5 percent; the Chinese 304 stainless steel scrap price rose by 0.5 percent as well. The price of Chinese 316 stainless coil remained essentially flat at above $5,000 per metric ton. The price of Chinese 316 stainless steel scrap was unchanged at below $2,900 per metric ton.

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Chinese Ferro Alloys Taking It Easy

On April 16, 2012, the price of Chinese ferro-moly was unchanged, hovering above $23,000 per metric ton. For the fifth day in a row, the price of Chinese ferro-chrome remained essentially flat, staying above $1,300 per metric ton.

Chinese Stainless Prices Holding Pat

Chinese 316 stainless steel scrap saw little change in its price yesterday, hovering in the range of $2,900 per metric ton. Chinese 304 stainless coil held its value yesterday at near the $3,000 per metric ton mark. The price of Chinese 304 stainless steel scrap hardly moved yesterday, remaining in the mid-$2,900 per metric ton range. At over $5,000 per metric ton, the price of Chinese 316 stainless coil kept steady as well.

Nickel Prices Slowing Down

Following a two-day rise on the LME, the 3-month price of nickel flattened at $18,455 per metric ton. The primary nickel cash price flattened out at $18,400 per metric ton following a two-day increase on the LME.

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Chinese 304 Stainless Steel Scrap Prices Fall 3.7 Percent

Chinese 304 stainless steel scrap saw the biggest price shift of the day in stainless prices, dropping 3.7 percent on April 11, 2012. For the fifth consecutive day, Chinese 304 stainless coil prices held flat near $3,000 per metric ton. Chinese 316 stainless coil prices saw essentially no change for the fifth day in a row, remaining around $5,000 per metric ton. The price of Chinese 316 stainless steel scrap remained essentially flat as well.

For the fifth straight day in the ferro alloys market, the price of Chinese ferro-moly held between $22,900 and $30,000 per metric ton. Chinese ferro-chrome remained essentially flat between $1,300 and $1,350 per metric ton.

The price of primary nickel rose by 0.8 percent on the LME to $18,010 per metric ton. The price of Chinese primary nickel declined 0.4 percent to CNY 131,500 ($20,837) per metric ton.

LME Steel Billet Cash Price Down Following Flat Spell

On April 11, 2012, the steel billet cash price on the LME fell by one percent and landed at $480 per metric ton, making it the day’s biggest mover in steel prices. Following three days of little change, the LME 3-month price of steel billet rose by one percent to $505 per metric ton.

Chinese raw steel prices closed flat for the day. The range of prices of iron ore 58% fines from India closed under $130 per dry metric ton. For the fifth day in a row, the price of Chinese coking coal remained essentially flat. The price of Chinese slab held flat as well.

The 3-month price of US HRC futures contract saw essentially no change for the fifth day in a row, remaining around $692 per short ton. For the fifth consecutive day, the US HRC futures contract spot price held flat at $690 per short ton.

After Three Flat Days, Cash Price of Primary Aluminum Drops

On April 11, 2012, the day’s biggest mover in aluminum prices was the LME cash price of primary aluminum, which saw a 0.2 percent decline to $2,050 per metric ton. For the fifth day in a row, the 3-month price of primary aluminum remained essentially flat on the LME at $2,089 per metric ton.

Chinese aluminum prices were flat for the day. The price of Chinese aluminum scrap saw essentially no change for the fifth day in a row, remaining between $2,600 and $2,650 per metric ton. For the fifth consecutive day, the price of Chinese aluminum billet held flat between $2,500 and $2,550 per metric ton. The price of Chinese aluminum bar remained steady as well.

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Time to check in on our performance regarding steel price forecasts and prognostications, which we tend to do in January of each year. Ever since I heard Jorge Vazquez of Harbor Aluminum suggest the notion of a “good month to buy aluminum” (which I found so peculiar, if not downright intriguing – you’ll have to drop me a line if you want to know what month he suggested), I have often wondered if steel followed any similar pattern.

Back in September, I suggested steel prices trough in the summer months (July/August) as well as in the month of December (or November).

Source: MetalMiner IndX(SM)

So it appears as though a slight trough did occur at that time. I also suggested back on Dec. 20, 2011, that prices “slowly increase throughout Q4 and into Q1” (which they did). Furthermore, I suggested prices will rise, but “we remain a little less than enthused about a big price run-up throughout Q1 and into Q2.” Prices for hot rolled coil and cold rolled coil increased by about 11-12 percent, hitting their peak during the week of Feb. 7, 2012.

Source: MetalBulletin & Ariba SupplyWatch

None of this suggests we ought to win any award for predicting prices; rather, we do have the makings of a trend (for years 2010 and 2011, we see some patterns). The above-referenced chart shows a run-up in prices post-February through May, followed by another August trough. (2008 and 2009 represent exceptions.)

As Mike Petro, lead category manager from Accenture, noted in his latest SupplyWatch report: “…current prices remain near the levels from the last stable pricing period in 2010. The current comparatively calm period of steel pricing is a welcome relief from modest volatility in early 2011 and violent volatility during 2008 through mid-2009.”

By no means, though, do we suggest to “sell in May and go away.” Market watchers will want to pay close attention to the patterns — steel prices have begun their summer ascent.

Let’s see what August brings.

 

Accused of stealing 4 to 6 million dollars’ worth of scrap metal, a father-and-son duo are now facing charges.

According to WSAV 3, the investigation began back in February when authorities acted on a tip that an individual was stealing metal from OmniSource, a scrap metal processing center in the county of Swainsboro and transferring it through another county (Effingham) — avoiding Interstate 16. With this knowledge, Effingham authorities stopped a vehicle — for a bent license tag — that fit the description.

What raised suspicion?

“You don’t use a tandem axel dump bed trailer to haul a little bit of scrap from your yard. It’d cost you more in gas than you’d receive in the metal,” said Effingham County Sheriff’s Deputy Jason Fondren within the article.

After asking the driver, Charles King Jr., 39, permission to search the vehicle, authorities found 55,000 pounds of stainless steel in his trailer.

“It’s hard to have that amount, that much metal in your yard, just sitting in your yard… However you load 55,000 lbs of stainless steal [sic],” said Effingham County Sheriff’s Deputy Matthew Petrea added. (Ed. note: a hilariously fitting, even if unintended, pun in that original quote.)

Deputies were able to determine the scrap metal and trailer had been taken from OmniSource – where King’s father, Charles King, Sr., is manager.

A day or two after they stopped King’s truck, Effingham County Sheriff’s Office obtained information that Jarrell’s Top Dollar Recycling was receiving a significant amount of the stolen metal – leading to an examination of the recycling operation’s records of transactions.

Perhaps these two gentlemen would have benefited from reading “A Thief’s Sourcing Guide to Stealing Scrap” Part 1 and Part 2?

For advice on how your company can combat material theft, visit the Institute of Scrap Recycling Industries (ISRI) website. To report a scrap theft or browse theft reports, visit ISRI’s online alert system, ScrapTheftAlert.com.

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