The 2009 Institute of
Scrap Recycling Industries (ISRI) Convention and Exposition gathered approximately 4,200 delegates in the
scrap recycling industry in Las Vegas, Nevada last week, and became the second largest convention in ISRI history. This five-day event offered many workshops and presentations, with a good deal of focus on the ferrous
scrap market.
In the ferrous session, steel analysts told delegates that they expect
US steel demand will continue to remain sluggish for the duration of 2009. Gavin Montgomery, steel analyst from the CRU, stated in his presentation that
scrap consumption may not return to the 2007 level until 2012, due to the gradual pace of demand recovery and the overcapacity problem throughout the industry.
Chuck Bradford of Bradford Research Inc. indicated that some improvement will likely be seen later in 2009 or next year, although he also pointed out that the inventory cycle will take longer to complete than in the past, as some service centers are working off their overstocked inventories and inventories in the auto industry remain too high. However, he is expecting a
consumption up-tick over the next few months. Bradford said that 30 percent of
steelmaking goes to
construction and infrastructure, such as schools and hospital building, as well as highway and bridge building, which are all likely to benefit from the government stimulus package.
The economists that presented at ISRI, which focused mainly on the economic downturn, generally agreed that the economy is bottoming, though their views on the velocity of its recovery differed somewhat. Brian S. Westbury, Chief Economist of First Trust Advisors L.P., said that a V-shaped recovery could happen later this year. He said the ball that “rolled off the table when we saw economic activity get crushed” was, in fact, a “super-ball,” which has a lot of bouncing potential. Mr. Westbury sees signs that economic activity is stabilizing due to recent up-ticks in copper prices, the Baltic Dry Index and oil prices. Mr. Westbury said he believes that the economy “is turning the corner very quickly” and producers that are still de-stocking will find themselves behind the curve when consumer spending rises.
On the other hand, William O’Neill, Managing Partner of LOGIC Advisors, thinks that while the worst is over, the recovery has the shape of “a swimming pool bottom that comes down sharply, extends along the bottom and then surges.” Mr. O’Neill said that recovery is a slow process and that the US housing market is not expected to recover before the second quarter of next year. He told delegates to work off their fear and regain consumer confidence, as he expects to see things recover once this psychological barrier is broken.
The most notable speaker at the event was President Bill Clinton, whose speech about the necessity and strength of the
scrap recycling industry was quite well received. Other topics covered at the ISRI convention included: the outlook of different commodities markets, the Recycling Industry Operating Standard (RIOS), price risk management, storm water management, transportation equipment financing, electronics recycling, radioactive materials, the impact of bankruptcy on creditors and debtors, media communications and more. Besides the ferrous market, ISRI also covered the markets for nickel,
stainless, copper, aluminum, paper, plastics, tire and rubber. The conference also featured over 250 exhibitors.