There is a Chinese proverb that goes something like, “May you live in interesting times.” Those of us in the non-ferrous scrap markets are blessed to be living in very interesting times.
We have watched the markets go higher with copper reaching a 2017 high of over $3.00 per pound and all in aluminum pricing (Midwest Transaction price is determined by cash LME plus the MW premium) of over $1.00 per pound. That is the good news. The challenging situation has been finding prompt deliveries for all of the scrap units in the market. Many consumers are pushing appointments out weeks or months. This creates space and cash flow issues, but creates opportunities too.
These trends were already in place before Hurricanes Harvey, Irma, and Maria hit Texas, Louisiana, Florida, and Puerto Rico. We are hearing reports that there will be over 1 million automobiles that need to be scrapped adding Zorba, Twitch, and aluminum car wheels (ISRI spec Troma) to the near term supply over the next three to six months. There is also “hurricane scrap” consisting of baled old sheet mixed with contaminated extrusions. How long will it take for the demand for replacement products such as gutters, downspouts, hurricane shutters, and various other new construction items to affect our consumer’s demand for additional scrap units?
The other effect of the storms has been the lack of truck availability. FEMA has commandeered much of the van and flatbed capacity to move emergency supplies to the affected areas. This has made freight logistics very challenging almost everywhere in the U.S. and thus impacting the Midwest aluminum premium. This has just exacerbated some of the space issues that many of our member companies were already dealing with.
So now for the good news: those of us within ISRI have numerous networking opportunities through the Chicago Roundtable meetings, local chapter meetings, and of course the annual convention. Do you take advantage of these meetings to find new consumers, brokers or recyclers? It is in times like these that working with others or seeking advice from friends is especially valuable. I had a friend ask me for a list of freight companies to help him in a tough spot, we met and have become friends through our ISRI involvement. Meeting new consumers at the Chicago Roundtable has also been good for business. I know those of you who are involved and take advantage of these opportunities already recognize the benefits. For those of you who don’t, I challenge you to invest some time outside of the day-to-day to get involved and network through ISRI. Our company finds tremendous benefit in being involved.
I wish all of you a great finish to 2017 and a healthy and profitable 2018!!! May we continue to live in interesting times.
ISRI Nonferrous Division Chair