Supply and Demand Becoming an Issue for Steel Scraps

steelIn North America, roughly 69% of steel is recycled each year. In other parts of the world, however, too little or too much stainless scrap are both issues that affect in the recycling process.

According to Recycling Today Global Edition, China is making some important decisions that are affecting various aspects of the metal industry, including price, supply, demand, and material recycling.

China’s production of stainless steel tools has been decreasing significantly in recent years, due to various economic issues surrounding the country and international imports.

These decisions are affecting industries in the United States and United Kingdom. According to the Bureau of International Recycling (BIR), recyclers that work with stainless steel are suffering from China’s product output and a lack of scrap metal.

Referencing the global scrap metal deficit, Barry Hunter of Hunter Alloys LLC, stated that he has “never seen it like this” in his more than 50 years in the industry.

“There is a 10-year gap in new production,” said Salvatore Pinizzotto, a panelist at BIR and director of market research at International Nickel Study Group (INSG). He added that there are “plenty of nickel reserves available to the world, but the problem is to get this nickel out of the ground.”

For recyclers, keeping all that scrap that is declining in value can cause a serious problem, but being unable to acquire additional supply to complete orders or generate cash flow is a completely separate problem.

One way to combat this issue for recyclers and suppliers alike is to use downstream systems and auto shredders to separate materials.

“This allows the operator to be alerted that there is some type of improper condition,” said Scott Newell III of Newell Recycling Equipment. “If an adjustment can be made that reflects a problem within minutes rather than hours or even days, the benefits are great.”

It doesn’t look like China will return to its successful levels of the mid 2000s, so stainless scrap — until inventory levels are reduced — could continue to be an issue across North America and the rest of the globe.

If you want to learn more about metal recycling, strapping, or banding, contact Independent Metal Strap today!