Shred price forecast?

As most of us know the dominant volume of our scrapping and income received from scrapping comes from shred (not including e-scrap). I did some searching on the internet and could not find any definitive forecast for 2015 for shred prices. Prices at my yard are down to $115 from a high of $220 a few months ago. It seems the main driver for the fall in prices is the fall in oil (and subsequently fuel) prices. Saudi Arabia is the main instigator of the fall in fuel prices, as they did not want to lose their market share, especially to the US. It seems Saudi Arabia cannot continue this forever, as it would seem to hurt their income (and economy). Has anyone seen anything that has any forecast in 2015 for shred prices?

You could say the US is responsible for the drop in oil prices. We're the ones developing new techniques that increase production dramatically. The Saudi's aren't doing anything different now than they were in the last several years.

This is only one persons opinion and not fact. Based on information gathered I believe it to be accurate, but only the future will answer the challenge.

It is hard for me to understand the direct correlation between fuel prices and scrap value. It might be a simple equation that this small brain might not understand. To me, lower transportation costs means easier transport and lower cost for the foundries.

Therefore I believe this is more about macro economics than micro economics. If other countries are not making money on their fuel then they are not investing in their infrastructure. If they are not investing in their infrastructure, they are not buying scrap.

So these countries are not importing so our coasts shut down. This causes the interior to shut down. We try to move metal through Canada and Mexico which shut down their borders. So the coasts have a stockpile in their yards, Mexico and Canada yards are full to their limits, and now anything metal purchased is adding to the stockpile in the local yards because their is no where for it to go.

I am a big believer that the U.S. can and should be self sufficient in energy production. With all of this said, my strategy will mirror the big boys. If you have the room, time, and finances you should just sit tight and wait for the machine to start rolling again. The machine might not start rolling again for a month, six months, or as Old Dude predicts one to one and a half years. To simplify this perspective, it is like being constipated. It gets plugged up at the end and continues to back up until you can taste s***. Then a laxative comes along and relieves the entire system and everything starts flowing normal again.

Now after writing about it, I think I might understand. We are stuck in the world's bowel movement. Someone, please flush the toilet.

Nice analogy !!

Originally Posted by BRASSCATCHER

I agree with most of what you said patriot, only I would move steel as much as possible and sit on some of the non-ferrous for a bit. 75% of my non ferrous comes from the ewaste I process. Usually steel and boards go out as fast as they come in. Everything else either I am refining myself or waiting for the boxes to fill up before I sell.

I agree with your thoughts for those close to scrap yards and obtaining large quantities of non ferrous. For this operation hauling distances and focused on ferrous, it is hard to work the numbers right now. The good thing about the present situation, concentration of preparing a two year collection of non ferrous has become a priority. I feel blessed that a stock pile of non ferrous was collected for such an occasion. The goal is to use these funds for a second anniversary, 30 + years after we got married. Waiting until the price adjusts will make the difference between going across the street to enjoy our anniversary or a major trip. We always dreamed of going to the National Finals Rodeo in Las Vegas, something we could not do as educators.

As a footnote, we plan to see the entire United States before touring the world. This is based on preference and finances.

I love this time it separates the weak from the strong and makes me money when everyone is passing stuff by because steel is so low it means twice the work for the same money one would say blah blah blah but people forget that there also passing up on the goodies that normally are cherry picked and it goes the same with auctions all that goes to me and others that still work just as hard as they did before but now are getting a %30 hike in profits not to mention the fact that we get to sit on all the heavy prepared if we want to that people are passing up.
people are always saying fuel costs or some other excuse for things but its only those who don't manage their money correctly that drop out of this so I love this time when everyone is in a panic lol steel was at 2cents when I was a kid and I made good money my local yard is at 2cents lol so that's mine lol

Patriot the correlation between oil prices and scrap prices go lock in step. When oil is up so is scrap. More rigs driving more pipe into the ground using your recycled scrap that was melted down at an American mill. Unless it's imported pipe which is currently being dumped on our shores at a unreal rate. The strong dollar isn't helping either. It's actually doing more harm to the economy then low oil prices. Who's gonna buy our scrap when they have cheaper alternatives due to our strong dollar. Look at all the layoffs recently. Evraz and us steel both laying off employees. Cat laying off people in the mining sector. When the price is low is it cheaper to mine or buy scrap. You know the answer to that I am sure. Mills have months worth of inventory on the ground and the melt schedules are being reduced daily. Maybe this tidbit of info will help u out.

Weekly Raw Steel Production - January 31, 2014

In the week ending January 31, 2015, domestic raw steel production was 1,782,000 net tons while the capability utilization rate was 75.4 percent. Production was 1,824,000 net tons in the week ending January 31, 2014, while the capability utilization then was 75.8 percent. The current week production represents a 2.3 percent decrease from the same period in the previous year. Production for the week ending January 31, 2015 is down 2.4 percent from the previous week ending January 24, 2015 when production was 1,825,000 net tons and the rate of capability utilization was 75.9 percent.

Adjusted year-to-date production through January 31, 2015 was 8,108,000 net tons, at a capability utilization rate of 77.4 percent. That is up 0.4 percent from the 8,079,000 net tons during the same period last year, when the capability utilization rate was 75.8 percent.

Broken down by districts, here's production for the week ending January 31, 2015 in thousands of net tons: North East: 217; Great Lakes: 670; Midwest: 226; Southern: 582 and Western: 87 for a total of 1,782.

Well this business we are in is a buy it sell it, if you think that it does not cost you money, picking up, palletizeing , storage, reloading when the market turns around, if and when it turns around. Sitting on copper, and aluminum if you could might in the long run pay off, but sitting on shread/ tin just doesn't make business sense to me. Buy it sell it and keep going, just my two cents.