Feb. 1, 2017
 
Pickard: Scrap Poised for Overdue Good Year

The scrap industry is “long overdue for a good year,” and 2017 just might be that year, said Joe Pickard, chief economist and director of commodities for the Institute of Scrap Recycling Industries in Washington. Pickard addressed the Association of Women in the Metal Industries event last month in Chicago.

Pickard pointed to several positive economic indicators for the scrap market: strong second-half GDP growth in 2016; inflation levels within the Fed’s target range of 2 percent; low unemployment levels; and improved metal prices. Those conditions have led analysts to upgrade price forecasts for scrap material in 2017.

The most encouraging trend is in general manufacturing. The domestic PMI, based on a survey of corporate purchasing managers, spiked to 54.7 percent in December (a reading above 50 indicates growth), with month-over-month gains for such leading indicators as New Orders, Production and Employment. The global PMI is also on the upswing, with positive readings in the Eurozone, China, Japan, the UK and Russia. “Even incremental improvements in manufacturing could translate into significantly better conditions for recyclers in 2017,” Pickard said.

Recycling companies, however, “should temper those expectations, given how many things are going on in the domestic and global landscape,” he cautioned. While the new Trump administration is pushing some ideas that sound promising to the sector, including the focus on manufacturing and a more favorable corporate tax structure, its attack on globalization is a concern for scrap, which is a global commodity.

While U.S. scrap exports have fallen dramatically over the past five years, on both a volume and dollar basis, the export market remains an important one for the domestic scrap industry. Any aggressive actions taken on the trade front at home could result in retaliatory measures abroad, which could shut off some markets to scrap sales. “That could be an unintended consequence of some of the statements we’re seeing coming out of D.C. right now. The IMF has warned that decreased global trade liberalization has weighed on global growth,” he said.

With the possibility of existing trade agreements being abandoned or renegotiated, Pickard said, it’s imperative for the U.S. scrap industry to begin developing new overseas markets outside of China.


September 2017: Numbers Don’t Add Up for Service Centers
More...
 
Pause
September 2017: Lichtenstein: Five Steel Truths that Demand Attention
More...
Fall 2016: Cutting & Sawing Equipment
More...
Summer 2017
More...
 
Pause
Advanced Controls on Braner Slitters
More...
AHVS Precision Leveler Features Flip-Top Design
More...
Formtek’s Tishken Slitter Increases Production Volume
More...
Red Bud System Handles High-Strength Steels
More...
Bradbury Launches Flat Trak CL Monitoring System
More...
Artus Knives Custom Designed
More...
 
Pause
Privacy Statement  |  Terms Of Use
Copyright by Metal Center News



Thursday, October 19, 2017