Despite a currently sluggish domestic scrap market with a dearth of buyers and a surplus of stock, a high-ranking Gerdau Ameristeel executive told analysts yesterday he believes scrap prices will be on the rise early next year.
Speaking during Goldman Sachs" annual global steel CEO forum Ameristeel chief operating officer Terry Sutter said US scrap yards currently are full and scrap merchants have essentially written off the rest of 2008.
"You can call them right now, and they"re just sort of home for the holidays," Sutter said. "The one thing I don"t worry about is the availability of scrap."
However, as the economy improves and electric arc furnace mills bring idled capacity back online next year, that situation could change.
"I think scrap pricing is at the bottom, and I think you"re going to see scrap having more of an upward bias going into the first quarter than a downward bias, for sure," Sutter said, adding that Ameristeel, with a 40% captive scrap position and ability to make strategic scrap acquisitions going forward, is well-positioned to weather the anticipated upturn.