March 15, 2022

To our loyal customers of Kimmel Scrap:

The March scrap market has gone up to prices that have never been seen before and at a pace that has not been seen either. The Russia and Ukraine war has caused worldwide commodity chaos. We saw copper COMEX hit as high as $5.00 per pound and nickel prices soared from $13.52 per pound on March 4 to over $45.35 per pound on March 7 only to have the London Metal Exchange suspend nickel trading for the first time in its 150 year history for any commodity.

So what is driving the steel market to increase at such a rapid rate? It comes down to pig iron. Over 60% of the United States pig iron comes from Russia and Ukraine. As a result, Brazilian pig iron is where most of the remaining pig iron comes from. It is less desirable due to high phosphorus content and not being as “clean” as pig iron from Russia and Ukraine. Brazil is incapable of filling the gap left by the loss of pig iron from Russia and Ukraine which has resulted in pig iron prices increasing equally as fast. The best substitute for pig iron is busheling. The automotive industry is the prime source for busheling and since they make a limited number of cars per year there is a limited amount of busheling. It then comes down to simple supply and demand. Regardless of how much is paid for busheling there is only so much to go around. As long as steel demand remains high as it has we will likely continue to see scrap steel prices and finished steel prices increase.

To some this feels like 2008 all over again and there are some similarities. I see 2022 being a tumultuous year for scrap and steel pricing. We are truly in unprecedented times.


Robert Kimmel-100
Ken Schutt-102
T.J. Yarema 103
Nicole Lamar-107
Sam Peters-109
Holly Sievert-115