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Message from the Nonferrous Division Chair

Happy New Year to all of you. This will be my last column as Chairman of the Nonferrous Division. Please indulge me while I thank a few people who have made this experience easy and enjoyable.
mattkripkeMy executive team of Randy Goodman, Andy Wahl, and Kevin Lamar did an incredible job of providing guidance, prioritizing issues, rewriting specifications, and running meetings. Andy Wahl has been nominated to take over as Chair after the convention. Our Division is in good hands with him leading the way. Joe Pickard provides a Nonferrous economic outlook at all of our board meetings. These reports are very insightful and provide some real meat to those in attendance. Please come to our next meeting on Monday, April 16 at 7:30 a.m. in Las Vegas to see for yourself. Thank you Joe, Randy, Andy, and Kevin.

Now on to the markets: A year ago at this time, the predictions were pretty dire. All of the experts were telling us the terminal markets were going to remain pretty flat. Well, 2017 was far from flat, we saw 5 year highs on many of our commodities. But we also saw scrap spreads widen substantially last year. I know this makes me sound like an old-timer to say I remember when we could sell #2 copper at 20 cents under and last year that spread was out to 40 cents. I remember when 5052 sold at 4 to 5 cents under the Midwest Transaction Price and then last year we saw that spread widen out to 15 cents under at times. 2017 saw a new phenomenon of mills quoting deliveries that were 2 and sometimes 3 months out in the future. Having a delivery appointment became just as important as the price (sometimes more important). Then the hurricanes hit and trucking became a nightmare for many of us. Some consumers have told me they are scheduling 15 appointments a day because they need 12 to deliver each day. They are counting on trucks not showing up.

So what can we expect in 2018? If January is any indication, it may be similar to 2017. Trucking is even more of a challenge and material is still plentiful. The terminal markets have taken a breather but are still near or at 5 year highs. The China situation is still going to be interesting to watch as Zorba, Birch/Cliff, and other scrap grades are still being traded. But with the new standards, we are hearing that some Chinese consumers are moving to other countries to process some grades. U.S. copper scrap exports to China and Hong Kong together were up 6 percent by volume in 2017, a pace that may be hard to replicate this year. To hear what the “experts” have to say, come to our Spotlight sessions in Vegas and decide for yourself if they actually know what they’re talking about. It has truly been my pleasure to serve all of you for the past 2 years, thank you for allowing me to serve. May 2018 be a great year for all of us and I hope to see you in Las Vegas for the 2018 Convention!   

Sincerely,
Matthew Kripke
Nonferrous Division Chair

Nonferrous Beat

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