Feeling contrary. (Ferrous).

Borrowing a sentiment from a country and western song, the ferrous market has been down so long it has forgotten what up is.

But fatalism is not the prevailing mood among all scrap dealers, many of whom are adopting a determined survivor's approach. Equipment dealers are noting steady interest in orders for new and used equipment financed with record-low interest rates, and the orders are coming from processors who are still seeing enough volume to feel bullish about their long-term prospects.

"Auto sales aren't at their record high, but they're not down all that much, and building activity is still fairly good," notes Manny Bodner of Bodner Metal & Iron Corp., Houston.

Imports of finished steel, slabs and ferrous scrap continue to get a lot of the blame for North America's market conditions. Steel industry analysts point to global steelmaking overcapacity as the ultimate culprit.

In Houston, as in other parts of the country, some industrial generators are down sharply while others continue to hum along. Over the scale traffic remains down, although auto dismantlers are bringing car bodies to shredder yards despite the low prices.

Mike Spear of Samuels Recycling Co., Madison, Wisc., told attendees of ISRI's Ferrous Roundtable that shredder feedstock "keeps coming in ... even though we're paying our lowest iron prices in 20 years." Spear says the dismantlers "need the money to pay their light bills."

No. 1 Heavy Melt Composite Pricing
(Per gross ton, monthly average)

September 2000   $92.00
October          $82.56
November         $74.53
December         $78.60

January 2001     $84.83
February         $75.37
March            $76.77
April            $77.90
May              $76.67
June             $78.62
July             $79.81
August           $80.00
September        $80.00

Source: American Metal Market

Note: Table made from bar graph.