We expect to see steel surcharges and prices on the climb as manufacturing economic activity starts to recover. The current 2.8 times increase for the scrap surcharge compared to June does not bode well for moderation in increases going forward.
The scrap surcharge for August 2009 was announced to be $7.00 by Republic Engineered Products. The scrap surcharge for carbon and alloy steel cold finshed bars was $2.50 per hundred weight (cwt) when we prepared the June Materials Impact Report.
US raw steel production is up slightly at ~3% over prior week according to AISI. Exports to Turkey and lack of manufacturing activity in North America to generate new scrap are possible factors.
Chinese steel production has been on a tear- up 10% in June according to various press reports.