Worth the Effort
Date Posted: September 30, 2021
Posted In: Environment/Sustainability, News,
From Construction & Demolition Recycling: As the United States and many other parts of the world have rebounded from the severe COVID-19-related restrictions imposed in the spring of 2020, prices of both steel and ferrous scrap have rebounded and held onto those gains.
For construction contractors, the soaring cost (and occasionally spotty availability) of steel has at times been a burden. For demolition contractors, on the other hand, higher scale prices for ferrous scrap have yielded additional bidding opportunities and additional revenue.
History has shown that lofty scrap prices eventually decline, or even plummet, but the first eight months of 2021 have been good news for both generators and sellers of ferrous scrap.
A spike with staying power
In early August, steel mills in the Midwest were buying ferrous No. 1 heavy melting scrap (HMS) for $455 per ton, according to surveyed pricing gathered by Fastmarkets AMM. Data collected by that publication and by the Pittsburgh-based Raw Material Data Aggregation Service (RMDAS) of Management Science Associates demonstrates the ongoing strength of the 2021 ferrous scrap market.
Last August, as the U.S. economy tried to bounce back from pandemic-related restrictions, RMDAS pegged the No. 1 HMS price at $226 per ton. HMS is usually the closest in price to the plate and structural (P&S) grade paid by recyclers for the scrap iron and steel loads leaving demolition sites.
Prices for HMS and P&S have risen several times since then and have seldom backtracked. According to RMDAS, mills were paying an average of $270 per ton last November, $429 per ton this January and $477 per ton this June.
While scale prices track lower than that to allow processors to make a margin, the positive trend has made a difference in demolition bidding and job scheduling.
This March, a local media report from Youngstown, Ohio, indicated that the city would pay less than expected to demolish a bridge thanks to the steel content of the aging structure combined with the high-value ferrous scrap market.
An online report from Youngstown’s The Vindicator newspaper indicated the three bids Youngstown received to demolish a 78-foot steel girder bridge over an abandoned railroad right of way were “significantly less than the city’s estimate” for the project.
A deputy director of public works was quoted by the newspaper as saying, “There’s so much steel on the bridge, which was a factor in the estimate being high. We’re conservative with the salvage value of steel.”
While the city estimated it would receive bids in the $950,000 range, instead the three bids received checked in between $580,000 and $650,000.