Today is Monday, March 9th, 2015. My name is Greg Brown, President and CEO of the companies.
For many, last week was Ferrous selling week. The clear expectation going into the week was that prices were going to be down about $20/GT, about $1.00/hundred pounds, even though prices had tumbled to multi year lows in February, but Mother Nature had a different idea. With February weather being horrific in the Northeast and Southeast, flows of obsolete material into scrap yards were at low levels not seen since the crash of 2008. This meant that any further price reduction would have caused shortages of some commodities, so prices were mostly sideways, other than for some isolated areas in the Midwest that had an approximate $10/GT decline.
Copper which hit a multiyear low of about $2.41 per pound on May COMEX about a month ago, had a nice steady increase to about $2.70 a week ago, but last week we saw a significant steady drop to about $2.61 as of Friday. Copper did have a little bump up this morning to $2.63.
Aluminum, which has also been struggling, hit a new approximate monthly low on Friday.
On the economic front, there was a lot of big news. First, the number of U.S. jobs created last month was higher than forecast; a terrific 295,000, but this good news was followed by expectations that the Fed will increase interest rates sooner rather than later. With this expectation, the stock market which was hitting new highs in the past week, crashed on Friday, with a stunning 1.4% drop in the S&P 500. This also led to a 13 year low of the Euro against the dollar and some forecast further Euro weakening. The low Euro vs. the dollar is part of what is driving significant amounts of scrap metal and finished steel to come to the U.S. from Europe, and less scrap metal to be exported. These are part of the reasons for today’s low U.S. scrap metal prices.
Oil prices were down a bit in recent days due to a report on increased inventories, and there was yet another drop in the U.S. Gas and Oil drilling rig count. The rig count hit a high of 1,609 in October 2014 and hit a low 922 last week, a stunning 43% reduction. This reduction has caused layoffs at places like U.S. Steel which makes steel for the drilling industry.
U.S. steel production in January, a short 8 weeks ago hit a multi-year high, with capacity utilization at about 79%. As of the end of February, production had dropped to a new multi-year low. The decline is a big 14% and a capacity utilization of about 70%.
On the positive front, not only is the job market in the U.S. continuing to improve, both China and European governments made moves to improve growth. Also, positive is that while gasoline prices are a bit higher in recent weeks, they still remain significantly lower than a year ago. This is a global shot in the arm for consumers and companies, which should shortly help growth here in the U.S. and many other parts of the world.
With that we hope all have a great Safe and Profitable week. Tune in next week for the Monday Commodity and Recycling report.
For today’s prices call our main number at 919-731-5600 and after the Greeting, Press 1, you will hear a recording of “Today’s Prices“.
Raleigh Scrap Metal Recycling
2310 Garner Rd.
Raleigh, NC 27610
When in Wilson, NC, Tarboro, NC, Rocky Mount, NC, Greenville, come see us at:
Wilson Scrap Metal Recycling J & G
404 Maury Road S
Wilson, NC, 27892
Tel 252-243 3586
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