The industry's capacity-utilization rate was as high as 96.1 percent for the week ending Feb. 28th. This strong production and the corresponding metallics demand aren't a surprise. But scrap and other metallics are in abundant supply. Processors and mills typically lay down some inventory to hedge against delivery problems during the winter. But because of a mild winter in major scrap-generating and consuming areas, the flow of material from suppliers to users has been unbroken.
Industrial production continues to be very strong.
Boatloads of distressed metallics recently arrived at the all-important port of New Orleans. Transportation in the U.S. West and Southwest also improved slightly in recent months. Scrap that previously was bottled up in California ports found homes as far east as the Mississippi River. Many in the scrap market believed that prime grades were overpriced at the beginning of the year and that a modest correction would occur. Prices for high-residual grades also decreased.