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Tracking the scrap metal market over the last 5 years, the month of July has averaged a 3% decrease compared to June. In July 2017, things were no different as the scrap metal price for crushed auto bodies averaged a 2.9% decrease nationwide. Per gross ton the national average falls to just below $179. A drop of more than $5 from June. This is also the first time scrap metal prices decreased in a year over year comparison after 14 consecutive months of increases. Dating back to May 2016 YOY increases averaged 32%. While July’s YOY comparison shows just a marginal .2% drop it is a drop nonetheless.
Four out of five of the regional zones that break up the United States had monthly changes, positive or negative, of 3.5% or less. Zone 4 or the northeast stretching out to the Great Lakes region had the only significant month to month differential. Compared to June Zone 4 decreased almost 13%. We haven’t seen too much volatility in August in the past 5 years but we will have to keep an eye on it to see if steel scrap prices continue to drop for the third month in a row.
At the recent G-20 meeting, world leaders “agreed to address growing overcapacity and rock-bottom prices in global steel markets.” With the threat of a trade war on steel negotiations were proving to be difficult accord to a recent Bloomberg article. A key passage urges world leaders to “urgently” seek the removal of “market-distorting subsidies and other types of support by governments and related entities.” U.S. officials were able to get language inserted to set deadlines for members to address excess steel production. We will see how these meetings effect pricing going forward and if there is any trickle down effect on the scrap metal market.