The Midwest scrap market has had more than its fair share of challenges in 2015. Even though B.L. Duke expects Midwest ferrous scrap prices to rise in June, this does little to restore us to the levels realized in 2014. With market troubles still weighing heavily on our industry, companies must think outside the box and create opportunities for themselves. While B.L. Duke is hopeful the fundamentals of our industry will continue to improve, we refuse to sit on our hands and hope for the best.
As May is coming to a conclusion we have turned our attention to June’s scrap pricing and for the first time in 2015 there is positive sentiment. B.L. Duke expects scrap prices to increase in the range of $10 to $15 per gross ton. We have heard rumors of even larger jumps, but we do not see anything to substantiate them. With construction season picking up steam and an impending trade case against foreign steel imports, demand for domestic steel will grow. A tick up in the East Coast export market should also assist Midwest markets. Even though the East Coast is still slow any material that leaves for foreign ports is seen as a positive for the Midwest market.
Let’s not kid ourselves, the Midwest scrap market and the domestic steel industry have an incredibly long road back to where we would like to be. The strength of the US dollar appears as if it will continue to be a drag on both industries for the foreseeable future. The economic situation is Europe will not correct itself quickly enough and the US economy does not look like it can support our industry on its own.
This is precisely why B.L. Duke continues to seek alternative homes for scrap outside of the Midwest. While Midwest markets have remained relatively stagnate in 2015, B.L. Duke is taking advantage of our water front facility and selling barge loads of scrap outside Chicago’s market. “It’s a great advantage to be one of only a couple industrial scrap companies that can move barge loads of scrap out of the Midwest market,” states Lou Plucinski, B.L. Duke’s President. “Being in a town as notoriously competitive as Chicago means every efficiency adds to our strength and creates new opportunities.”