We attended The Steel Index’s Scrap Seminar in Chicago last week and heard a variety of views on the current scrap market and the overwhelming changes in the market for this once-quiet commodity.

One over-riding theme was scrap’s strategic importance to the U.S. steel industry and increasingly to the world’s steel industry.

A question as to whether or not the United States is doing enough to protect scrap supply was raised by Rich Brady, Executive VP of Omnisource. According to Mr. Brady, “There is a global tug of war for scrap materials.” He went on to outline how 20 countries have ferrous scrap export restrictions, and despite scrap being one of the top 5 commodities exported from the United States, our nation has no similar restrictions on exports.

This issue of increasing exports of U.S. scrap was pointed to as a driver of scrap price increases and volatility by the Institute of Scrap Recycling Industries’ Chief Economist and Director of Commodities, Joe Pickard, who pointed out that the increase in scrap volatility coincides with increasing exports to foreign markets.

The general consensus at the seminar was for scrap demand to continue to grow moving forward, particularly as China adds more EAF-based production to improve the regions’ air quality.