IC 8243 Iron And Steel Scrap In The Pacific Northwest (93ef4331-12a5-4caf-a813-417e3786d55c)

This examination of Pacific Northwest (Idaho, Montana, Ore on, and Washington) ferrous scrap-industry opera ions, principally those in Oregon and Washington, points out factors influencing the supply and consumption of scrap materials, such as the complete dependence of steel ingot producers in these States on scrap as a metal raw material and the sizable quantity of scrap exported from Seattle and Portland to Japan. The pattern of the industry is presented as a movement of materials from their diverse sources to the consuming market. The geographic locations of the consuming industries in relation to the area generating scrap materials and the movement pattern of the supply from source to destination strongly influences the cost of the commodity. The best measure of the scrap supply available in an area is experience in terms of how much scrap was withdrawn at a given price. Scrap availability is not finite, because the return of materials as scrap is secular and influenced by constantly varying market conditions. Steel ingot producers use 75 percent of the approximate 500,000 tons of scrap consumed in Oregon and Washington; steel foundries take 15 percent of the total; and iron foundries, ferroalloy plants, and other miscellaneous consumers utilize the remainder. Also, from 1955 to 1960 an average of about 200,000 tons has been exported annually from Oregon and Washington. The foreign exports are supplemented by lesser .shipments to other steel producing States, principally in the western United States. From 1955 to 1960 the preferred and higher value heavy melting scrap grades accounted for about 60 percent of total withdrawals which varied between 600,000 and 950,000 tons annually. Total scrap withdrawals from Oregon and Washington are projected to 1.8 million tons by 1985, 60 percent (1.1 million tons) of which will be heavy melting grades. No. 1 heavy melting scrap is most attractive to scrap consumers at $35 per ton or less. Price-supply relationships compared with projected scrap requirements indicate future prices possibly over $35 per ton. High prices over a long period could motivate the Pacific Northwest scrap consumers to produce steel from iron ore. However, technologic changes taking place at integrated steel plants could reduce scrap withdrawals from the Pacific Northwest, which might keep the scrap price sufficiently attractive to obviate production of competitive iron products by the Pacific Northwest scrap consumers.