| RSS
Business center
Office
Post trade leads
Post
Rank promotion
Ranking
 
You are at: Home » News » internal »

Hurricane Harvey's impact on steel scrap could match 2012's Sandy: sources

Increase font size  Decrease font size Date:2017-08-31   Views:432
Hurricane Harvey's devastating impact on southeast Texas was bringing back memories this week of 2012's Superstorm Sandy, which hit another major metropolitan area, New York City.

Harvey continued to pummel the region and the full extent of the hurricane's damage -- and its impact on ferrous scrap and steel markets -- has yet to be assessed. Rain and wind from the storm was being felt far outside of Houston, and on Tuesday its outer bands reached Louisiana.

"This is a game changer in the markets," one trader said. "Louisiana and Texas are both scrap states and steel states. Scrap is going to come out, but not in the short term. It will take time, but when all of the scrap comes in, so much more steel is needed. It will not be a surplus. This will create even more demand for the Turks to ship rebar into Houston."

Scrap dealers noted that when a major storm hits a highly populated area, light iron and shreddables historically have been the first grades of scrap to come out, followed by automobiles, non-ferrous grades and heavier steel.

In 2012, when Sandy hit the eastern seaboard, the US scrap market was coming off two consecutive months of falling prices in September, and October and November expectations were already bullish.

"Of course scrap is going up," one southern scrap executive said at the time in 2012. "It was going up before the storm -- now it might go up another $10."

The prediction proved accurate as expectations of $40/lt increases turned into actual rises of $45-$55/lt in US Northeast and Midwest markets.

This time, unlike in 2012 when scrap fell the previous two months before Sandy, scrap prices rose in July and August. However, much like November 2012, bullish expectations have persisted about the September scrap market for the past three weeks. S&P Global Platts' daily shredded scrap assessment was $305-$320/lt delivered Midwest mill on Tuesday.

"Sandy eventually generated a good bit of scrap in the Northeast, but it took a little while to come into the yards," one Northeast scrap dealer said. "I think this storm will have a bigger impact on that region because it's right before the buy, prime is already tight and it seems more paralyzing than Sandy."

Voestalpine's hot-briquetted iron facility in Corpus Christi, Texas, was taken offline August 24 in preparation for Harvey's arrival. Late Monday, the company issued an update saying "it should be possible to begin ramping up the plant sometime next week ... However, this is highly dependent on external developments including the electricity supply, infrastructure availability, spare part deliveries, etc in this region that has been declared a disaster zone."

The market is particularly interested in the status of the HBI facility, considering the tight availability of prime scrap and the current unplanned outage at Nucor's Louisiana direct reduced iron facility, which has been offline since July 25.

Houston scrap shredders at Texas Port Recycling and Derichebourg are both located near the flooded Buffalo Bayou. There were no immediate updates from the companies on the status of their shredders.

"It's hard to see how much scrap could flow out of [the] Houston area this month," one local scrap dealer said. "Coupled with Nucor DRI being down, and [if the steel mills are] unscathed, it will be interesting to see what happens."

A south Texas scrap supplier avoided flooding at his yards, but was feeling the logistical impact on rail cars and barges. He noted that several ships destined for ports including Houston had been diverted to Brownsville, Texas, and were taking up dock space and preventing access for barges. In addition, he said he was waiting for empty rail cars that had been delayed.

Logistical issues could extend far beyond the storm's path. Rail car availability has already been a widespread issue under normal circumstances in the US this year.

"Freight delays will be widespread throughout the country, while carriers play catch up with any material that was scheduled to move through the storm," another scrap supplier said.
 
 
[ Search ]  [ ]  [ Email ]  [ Print ]  [ Close ]  [ Top ]

 
Total:0comment(s) [View All]  Related comment

 
Recomment
Popular
 
 
Home | About | Service | copyright | agreement | contact | about | SiteMap | Links | GuestBook | Ads service | 京ICP 68975478-1
Tel:+86-10-68645975           Fax:+86-10-68645973
E-mail:yaoshang68@163.com     QQ:1483838028