Ferrous Scrap Markets Impacted by Disruptions to World Economy

SEATTLE (Scrap Monster): The disruptions to world economy have resulted in rapid shift to supply and demand in ferrous scrap markets.

The scrap purchasing activity has almost come to a standstill across various sectors including industrial, demolition and retail trade sectors. The shutdown of several manufacturing plants on account of aggravating virus concerns has notably trimmed the demand for scrap. To make things even worse, industry participants anticipate further notable dip in melt shop activity.

The Great Lakes region reported up to 75% decline in industrial scrap flows, mainly on account of slowdown in manufacturing activities on account of shutdown of several stamping plants. The industrial output and demolition activities have almost halved in the Southeast region. The construction and demolition activities in the region have virtually stopped. The processors in the Midwest expect ferrous scrap volumes to drop by at least 50% in April this year.

The scrap buyers in Southeast have announced significant reduction in scrap purchases for April, as more manufacturers are seen temporarily shutting down their electric arc furnace (EAF) mills, especially in Alabama, Mississippi and the Carolinas.

An improvement in ferrous scrap supply and demand is largely dependent on the ability of the manufacturing, construction and retail sectors to quickly return to normal operations.

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