In Hopkins’ opinion, the scrap and metal prices will continue to increase until U.S. steel production meets demand, or the tar- iffs on steel and aluminum are reversed. “Tariffs are having the opposite effect of their intended purpose. Increased demand in these materials is pushing businesses to import finished goods created from steel or aluminum rather than manufacturing them in the U.S. to avoid the tariffs,” Hopkins said.
For the scrap metal market, the future is very bright overall. As Hopkins pointed out, with recent trends in green energy, consumer shifts towards products made of recycled materials, and the rising prices of non-recycled ferrous and nonferrous metals, manufacturers will start turning towards recyclable scrap material to meet their pro- ductivity demand.
This is especially true for electric vehicle manufacturers who are purchasing mas- sive amounts of very expensive materials,” Hopkins said. “We’re seeing the S&P
GSCI Industrial Metals index rise by 17.5 percent year-to-date, indicating that there is serious and sustainable growth in the metals industry, and in turn, the scrap metal and recycling industry.” Slosse added that the long-term impli- cations are inherently tied to increasing demand for steel and copper especially if the current infrastructure bill becomes law, as well as other metals essential to the elec- tric vehicle boom.
“Primary metal production capacity will continue to increase, but due to these assets being capital intensive, investment will tend towards reducing risk – a bit slower than demand to ensure full asset utilization to meet return on investment and payback targets,” Slosse said. For recyclers, this also means the scrap metal markets will be in a good condition for strong prices, but they will need to have business agility to pivot for short-term, locally significant exceptions. “If your local market has new produc- tion capacity coming online soon – either
primary or smelting/recycling – plan accord- ingly,” Slosse said.
Recyclers should also keep in mind that the current shortage is probably more of a momentary supply issue from the impacts of COVID and the economy’s recovery. “The short-term shortage in some markets is due to transportation issues including a lack of trucks, railcars and shipping con- tainers,” Petruski said. “But in the long term, with increased domestic capacity coming online from new EAF production, there may soon be a persistent scrap shortage from what the historical supply balance has been.”
This article is reprinted with permission from American Recycler News magazine, which can be found at
americanrecycler.com.
Based in Minneapolis, Minnesota, Maura Keller is a seasoned writer, editor, and published author, with more than 20 years of experience.
She frequently writes about recycling and business-related topics for various regional and national publications.
Automotive Recycling
September-October 2021 // 21
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