July 2018 Steel Scrap Metal Market Forecast
As the summer temperature heats up, so is our economic landscape. We entered the summer with the onset of a tariff war with basically every other country, but critically China and the price of gas slowly going up with no plateau in sight. Not only did the tariffs on steel and aluminum cause a political divide, it also put a schism between those companies who would benefit and those that would suffer. The steel scrap metal market is very much at the center of this debate and predicting its future hinges on a variety of factors.
For US manufacturing jobs that have been reliant on international steel, these tariffs posed a considerable impact. We have already seen the impact on companies like Harley Davidson which said it was going to have to move its production overseas. However, steel producers would theoretically see an increase in demand and likewise an increase in production and jobs to offset the trade balance (which was one of the goals in the first place). It would also be logical to see an increase in steel scrap pricing as it took advantage of the local demand as well.
However in the month and a half, since the tariffs were put in place, we have yet to see a rise in scrap steel prices and in fact they have not fluctuated all that much. Retaliatory tariffs on US goods and even steel might have balanced out the demand preventing the price increase. This combined with a general uncertainty has seen many scrap producers sell their inventory indicating they are not foreseeing a substantial price increase in the coming future.
As we look at the July 2018 Steel Scrap Metal Market Forecast, the price of scrap steel might also be playing the long game. Some economists including those in the white house like Commerce Secretary Wilbur Ross dismissed those worries, saying all the countries involved “will get over it in due time” indicating the anticipation of compromises being reached before major casualties are inflicted.