Lethargic feeling.

The dog days of summer seem to have set in on the ferrous scrap market, as recyclers both report and anticipate a sideways drifting market.

Stable pricing offers welcome predictability on the one hand, but it can also cause apathy on the part of generators and small dealers, one recycler comments. "The market right now is lethargic," he says. "People are just sitting on their scrap. Nobody's interested, and you've got to struggle to be enthusiastic."

Seasonal slowdowns have hit many sectors of the generating market. "The busiest vacation weeks are before and after the Fourth of July," notes an Ohio scrap recycler. This year, when the Fourth fell on a Wednesday, that greatly diminished flow for that particular week.

On the buy side, some summer mill shutdowns are also taking place, although total capability utilization figures, as calculated by the American Iron and Steel Institute, stayed at 88 percent or above in the first two weeks of July. That compared favorably to June weekly rates that drifted between 85 percent and just less than 88 percent.

Mill buying prices as measured by the RMDAS system of MSA Inc., Pittsburgh, bear out the sideways nature of the market. The nationwide averages for three of the most commonly purchased ferrous scrap grades all moved by only $2 per ton or less in the July buying period vs. June.

Regionally, mill buyers in the RMDAS South region paid some $12-per-ton more for prompt industrial grades, but that was an exceptionally large move vs. trading of that grade and others across all other regions.

Three straight months in a narrow trading range seem to indicate a working balance between supply and demand. Although domestic mills are melting at a healthy clip and West Coast export yards are filling orders, scrap generation has been sufficient to fill those orders.

In export news, one owner of ocean shipping containers (Zim Integrated Shipping) has told its customers it no longer wants its containers used to ship loose scrap. Should other container owners adopt that policy, it would put a crimp in a small but growing market for containerized ferrous scrap.

The wider concern for ferrous dealers is where the market will head next and whether generators will continue to bring in material if prices drift down. With prices stable for three months, after taking a drop, one Eastern recycler has seen flow returning. "There's some price sensitivity, but it's kind of like gasoline: When it goes up, people say they won't buy, but eventually, they have to. It's the same with cash flow on metals; they'll still make a profit if they sell today vs. watching at it rust."

The watching it rust option does not seem wise to the Midwestern recycler, who says, "It's a very firm sideways market; nothing can make it go up or down right away."

(Additional news about ferrous scrap, including breaking news and consuming industry reports, is available online at www.RecyclingToday.com.)