<<CNBC will do a piece today in the 11:00 to 12:00 hour on steel production
increasing 20% this year... Since the industry needs scrap metal to produce it,
RECY should benefit...>>
Jim,
increased demand for scrap would result only if the steel production being replaced by the new capacity did not use scrap as its raw material. The Nucor release admitted that their addition would cause overcapacity in the industry. Most likely, NUCOR figures their new production will be more efficient and will replace older, less efficient capacity.
Now, do these older and potentially replaced plants use scrap or true raw materials - iron, coke, etc. to make their steel. If all scrap, no net change in scrap demand. If not (or if a mix), then this should be great for the scrap business in creating demand. However, prices may be controlled somewhat by other competing materials such as pig iorn. The end result may be steady to slightly increased prices for scrap, with no let up in demand. Not a bad business enviornment.
Anyone out there have an idea on this?
Regards,
Dan |
