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US mill margins ‘historically huge’ as scrap prices languish

US mill margins ‘historically huge’ as scrap prices languish

Dramatic falls in US scrap prices but continuing high operating margins amongst steelmakers have defused the assertion made just few months ago by the American Scrap Coalition that high US steel prices were caused by high US scrap prices, Blake Kelley of Sims Metal Management told the Bureau of International Recycling (BIR) convention in Düsseldorf last week.

Kelley drew attention to how currently published rolled steel prices of many US mills, and much reduced scrap prices “still allow historically huge operating margins,” citing one published example of a $660/gross ton difference between a just reduced rebar price and scrap purchase costs. He noted that such a margin “presupposes that the true steel sale price is as published, and also suggests any earlier made unfilled scrap purchase contracts were cancelled.”

Courtesy: Steel Business Briefing

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