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2015 A Tough Year For The Scrap Industry | December 2015


Out with the old and in with the new!

As we are all painfully aware, 2015 has been a very tough year for our industry and others buying or selling commodities.  I am pleased to announce that scrap prices are not falling this month…it appears prices have hit rock bottom and are slowing showing meager signs of improvement. Prices increased $10.00 GT in the Western U.S. this month while the remainder of the Midwest and Eastern states stayed flat.

Free­-trade agreements have largely failed to protect U.S. steelmakers from the impact of foreign steel products flooding the U.S. market leading to our current state of bulging overcapacity and slumping steel sales. This glut of mill overcapacity and oversupply has resulted in lower prices for scrap and steel products during 2015.

On the upside, the automotive industry and domestic construction are bright spots, particularly in nonresidential and commercial building.  Automobile and construction demand are forecasted to be strong in 2016 and the anticipated levels of growth in both industries may help to slowly improve our market as demand dictates.

Prices for scrap in 2016 are forecasted to remain lower than previous year averages due to the long term complexities currently existing in the marketplace. Price growth hinders on the following factors:

  1. The U.S. government’s ability to curb cheap U.S. steel imports. Cheap imports act as a ceiling for prices and undercut domestic supplies. Fair competition is good in any market but unfair price dumping damages healthy markets.
  2. Increased demand for new steel products will create a greater need for scrap and other raw materials and therefore raise prices organically while absorbing the scrap tonnage overhang.
  3. Increased scrap demand from other steel producing countries including China, Taiwan, Turkey, India, and others looking to source scrap from the U.S.
  4. A weakened dollar will help incentive export activities and help to curb cheap imports.

With any luck, 2016 will usher in some changes and stimulate scrap prices to more reasonable levels. One thing that is consistent when dealing is commodities is change.


Base metals are ending the year in very poor fashion posting double digit loses across the board. Aluminum and copper saw yearly decreases of 23% and 29% respectively. Nickel was the biggest loser in 2015 losing almost half its value and sharply decreasing stainless and other nickel alloy prices. Zinc also had a troubled path, falling nearly 30% while lead escaped the year only losing 13%. Hopefully prices will begin to find their traction in 2016 and begin the long road of recovery.

As of December 8, 2015 % Change
COMMODITIES 1 Month 6 Month 12 Month
Copper Comex ($/LB) $           2.04 -8.9 -24.6 -29.1
Aluminum 3Mo ($/LB) – LME  $           0.67 -3.4 -16.1 -23.4
Nickel 3Mo ($/LB) – LME  $           3.92 -10.4 -36.2 -44.2
Lead 3Mo ($/LB) – LME  $           0.76 0.8 -12.3 -13.1
Zinc 3Mo ($/LB) – LME  $           0.69 -8.5 -29.2 -29.5
Gold (LB/OZ)  $    1,071.10 -1.5 -8.9 -11.3
Silver ($/OZ)  $         14.25 -3.4 -10.9 -14.1
Crude Oil ($)  $         38.00 -16.8 -37.1 -36.7

Best Wishes for a Happy and Prosperous New Year!

Have a comment or prediction about the market? Share with us in the comments below.

Metro Group, Inc is located in Salt Lake City, Utahvisit main site>>

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