July 2012 | Steel Tracker
US market still slack: Long Product Analysis
Slack demand has kept US scrap prices low but downward pressure has been added by the form of the recovery.
Slack demand has kept US scrap prices low but downward pressure has been added by the form of the recovery. US manufacturing activity has risen ahead of a recovery in construction; the supply of good quality new process scrap from the manufacturing sector has increased faster than demand from bar mills. The mills may be glad to get scrap at a low price, but not the low demand from their customers that ultimately, is the reason that prices are low.
Mills now contend that scrap prices have hit the bottom of the current price cycle. They hope that their customers will believe that too, and start re-stocking before there is a general rise in prices. Meanwhile, mills that apply surcharges that rise or fall with the most recent scrap market price are due to lower transaction charges. However, as reported last month, the market has been in disarray, with unpublished...
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