Scrap metals price surge upward trend.

It is reported that after plummeting along with the rest of the economy, the price of scrap metals is surging upward.

Economists said that it is a good thing for the regional economy, in the sense that increased manufacturing is partly responsible for the increased price of scrap. But that increased price also means higher costs for manufacturers in northeast Indiana and northwest Ohio. And for some firms that buy and sell scrap, volatility can be bad news.

Mr Jerome Henry, a Fort Wayne businessman whose companies buy and sell scrap metals from stamping plants and other commercial sources, said that "It's a runaway train again. It's a squeeze for us."

The US Bureau of Labor Statistics this month reported that its seasonally adjusted producer price index for iron and steel rose 3.4% from January to February. That's after increases of 17.3% between December and January and 12.7% between November and December.

Mr William A Strauss, senior economist with the Federal Reserve Bank of Chicago, said that the index is a good measure of scrap prices.

The non seasonally adjusted iron and steel scrap index was 501.7, or about five times 1982 prices, in February. The annual index jumped from 335.2 in 2006 to 406.8 in 2007 and 566.8 in 2008. Then it plummeted to 338.1 in 2009.

Despite the recession, US companies exported 3.3% more iron and steel scrap in 2009 than they did in 2008. Analysts predict that as consumption of durable goods in China, India and elsewhere increases, scrap exports will continue to rise, making it more expensive in the US.

Source : www.journalgazette.net