Plunging oil prices below $30/barrel to 12 year lows. A tanking Chinese economy is bringing down the demand for our commodities. The strong dollar is making our finished steel more costly and unattractive.
All doom and gloom? No! Surprisingly, ferrous prices for January took a slight upward bump. Most mills brought down inventory for the year-end bean counters; then began the year with a deficit and had to pay to replenish their stockpiles. As you know – what goes up probably comes down (stay tuned for February’s update).
The cold temperatures could impede our inflow, freezing scrap to the ground. Frigid weather could use some of the excess oil reserves that the Iranians will be flooding the market place with. It’s funny to believe that Jack Frost is our friend.
On the Non-ferrous side, what alloy lost the most value?? In December 2014, LME Nickel was listed at $15,025/ton. At the end of 2015, it published at $8,700 – a loss of 42%. Clearly, this was the worst performers of the major metals. Hope you’re buying new stainless steel and other Ni alloys!
Check out this aerial view of our main yard. All concrete and asphalt with retention ponds on both sides; the office/non-ferrous warehouse in the background: