SCRAP METAL PRICES
Scrap metal is any primary metal or alloy that has been used in a device and
then recovered for reprocessing and subsequent reuse in another application.
When scrap metal has been reprocessed and, as is often the case, combined
with newly mined ore, it is considered once again a primary metal and can
command a far higher price than it could as scrap. Technically, primary metals
are unalloyed metals such as iron, copper, aluminum, and lead. Very often,
metal alloys can be of more value than the primary metals themselves. Iron and
copper are most often marketed as alloys. Copper alloys, brass and bronze,
have been sold in the scrap market for millennia. More recently, alloys of iron,
steels of various mechanical properties, have been marketed for subsequent
combination with primary metals.
Figure D.1 shows the average weekly U.S. production of steel. As can be seen,
total U.S. steel production, some of which is from scrap steel, has been highly
variable but has remained at about 2 million long tons per week. Also shown in
the figure is the average weekly steel production of the major producers: Pitts-
burgh, PA, Chicago, IL, and the western United States. These production values
average from 200,000 to 500,000 tons per week.
The total rate of U.S. steel production is about 90 percent of the total U.S. steel
production capacity, as shown in Figure D.2. These numbers are important to
the recycling of Navy and MARAD vessels because they establish that the mate-
rial introduced to the scrap steel market via ship recycling would not saturate
the demand and thus depress scrap metal prices. We estimate that the inven-
tory of ships will introduce about 150,000 tons of scrap steel per year. With the
markets being several orders of magnitude larger, this amount will not change
the U.S. price of steel.