This is one market. The other is a mixture of older material and a continuing overflow of incoming material from industrial accounts, namely metalworking manufacturers and machine shops. There are few if any homes for this scrap, traders say. This is why the price varies so widely. Thus, the buildup of unwanted turnings continues.
Processors have few options.
The industry's standard strategy has been to store the material until better times returned. While this often proved viable in the past, it might not work today. First, no signs of a price recovery are on the horizon. Second, the cost of holding material can become too expensive. Although bank rates for covering the cost of purchasing and storing scrap currently are low enough, the cost of handling the material has risen, a Midwest scrap executive says.