Strong demand is boosting the prospects for the scrap-steel market.

“We are fairly optimistic about 2007,” said Bob Garino, director of commodities at the Institute of Scrap Recycling Industries Inc., a Washington DC trade group, which represents over 1,400 companies around the country that process, broker and consume various scrap commodities. “I don’t see a whole lot of weakness here,” he said.

The market for scrap steel is a bit stronger and the strength of the market is lasting longer than what many in the industry anticipated, Garino said. “I think there were expectations that the first quarter might not be quite as robust as it is turning out to be.”

Supply is tight, mill demand is strong and exports are solid. “What we’re seeing is ongoing strength and there aren’t any good cheap alternatives,” Garino said.

The United States imported 4.1 million metric tons of iron and steel scrap in 2006, up 25 percent from 2005. The country exported 11.2 million metric tons, up 3 percent, Garino said. China, Taiwan, Korea and India are some of the major markets for scrap.

“We’ll always be net exporters” of steel scrap, Garino said. “If you’re a buyer of ferrous scrap, not only do you want a consistent rate of shipments, but also you really have to worry about the quality. That is very important to a steel maker.” ...read more