Scrap Market Research Articles

Recycled Newsprint Laws and Differential Taxation of the Press

Several states and municipalities have recently passed laws that require newspaper publishers to use specified minimum percentage of recycled newsprint.' These recycled newsprint laws represent a response to the glut of newspapers collected by communities seeking to reduce the volume of solid waste they must burn or bury.2 Requiring newspaper publishers to use recycled paper presumably enlarges the market for such scrap, eliminates the stockpile of old newspapers, and decreases the need for new landfills.3 The public's heightened awareness of environmental issues and the continued surplus of collected newspapers may lead more states to consider such recycling laws in the future. Recycled newsprint laws raise number of important questions under the First Amendment.4 First Amendment concerns arise because of the potential impact of the laws on newspaper circulation. Just as taxes decrease the level of consumption of the

Stationary Equilibrium In A Market For Durable Assets

This paper presents a dynamic model of consumer trading on the primary, secondary, and scrap markets for a stochastically deteriorating durable good in a stationary economy with perfect information and no transaction costs. We explicitly model the trading process by tracking each durable from its birth in the primary market, through its sequence of owners in the secondary market, until its death in the scrap market. We prove that a stationary equilibrium exists, characterize the distribution of consumer holdings of durables, and show that equilibrium asset prices are shadow prices to a particular regenerative optimal stopping problem. We show that each heterogeneous agent equilibrium is observationally equivalent to a homogeneous agent equilibrium. We derive a differential equation for equilibrium rental rates, and a functional equation which links rental rates to asset prices. These equations show precisely how the structure of durable prices and rental rates embody the functional form and population distribution of preferences, and the technological characteristics of durable goods.

Stationary Equilibrium in a Market for Durable Assets

This paper presents a dynamic model of consumer trading on the primary, secondary, and scrap markets for a stochastically deteriorating durable good in a stationary economy with perfect information and no transaction costs. We explicitly model the trading process by tracking each durable from its "birth" in the primary market, through its sequence of owners in the secondary market, until its "death" in the scrap market. We prove that a stationary equilibrium exists, characterize the distribution of consumer holdings of durables, and show that equilibrium asset prices are shadow prices to a particular regenerative optimal stopping problem. We show that each heterogeneous agent equilibrium is observationally equivalent to a homogeneous agent equilibrium. We derive a differential equation for equilibrium rental rates, and a functional equation which links rental rates to asset prices. These equations show precisely how the structure of durable prices and rental rates embody the functional form and population distribution of preferences, and the technological characteristics of durable goods.

Direct empirical estimation of efficiency in secondary materials markets: The case of steel scrap

The U.S. steel scrap market is used as a test case for a method of directly estimating the efficiency of recycled materials markets. Such markets are examples of commodity markets for which there is no organized futures exchange. If, as widely held, futures markets enhance market efficiency we attempt to answer the question of how recycled commodity markets suffer, if at all, from the lack of a futures exchange. In this paper econometric modeling and time-series methods produce robust estimates of market efficiency as measured by the percent of traders that possess the latest information concerning market disequilibrium. Based on the empirical results it would appear that on a monthly basis the steel scrap industry distributes its commodities in an economically efficient manner and therefore would derive little benefit from an organized futures exchange.

First Tests of the Schuman Plan

ROBERT SCHUMAN'S proposal of May 9, I950 to create a Coal and Steel Community in Europe found its final acceptance in the ratification of the six-nation treaty on June 25, I952. On February io, I953, the High Authority of the Coal and Steel Community proclaimed the opening of the common market for coal, iron ore, and scrap in the territories of the six member countries, and on May i, the common market for steel. The third anniversary of Robert Schuman's initiative found the Plan in full operation. Whatever may happen to other projects of integration now under way this venture seems assured of a span of life. A fifty-year treaty establishing a new form of control over the iron and coal industries of the six countries is in effect. This control, which has been hailed as the beginning of a European sovereignty, is exercised by an international agency of novel type. Neither intergovernmental nor intercorporate in nature, this agency, the High Authority, possesses sources of power that lie in diverse segments of the community. It wields this power by collecting and disbursing large funds and by regulating industrial processes in accordance with the basic law of the treaty and with the consent of the governed governments and industrialists that are bound by the treaty. Nothing short of a fundamental change of the power field in Europe could put the new institution out of existence. But what will its existence mean? The Metzer Platz in Luxembourg has become a center of administrative decision and activity of wide significance for the Continent's heavy industry, and a center of diplomatic and political life as well. There the High Authority receives the statistical reports, plans, requests, and complaints of producers, consumers, and dealers of basic products, and there it issues its new Journal Officiel and Amtsblatt which carry decisions on freight rates, prices, levies, subsidies, admissible and inadmissible market practices, and recommendations to national governments. It harbors meetings of the Council of Ministers, which is meant to coordinate the activities of the High Authority and the national governments, the Court of Justice, and the Consultative Committee of economic interest groups; while the Assembly, the parliamentary body, meets in Strasbourg, where it is a tenant of the Council of Europe. American, British, Swedish, Swiss, and other missions to the Coinmunity are observing the developments in Luxembourg and are making inquiries and representations to the members and staff of the High Authority. A large new bureaucratic and diplomatic apparatus has gone into business.

Industrial Economic Problems in the Post-War Aluminum Market in the United States

THE aluminum market in the post-war years in the United States has provided somewhat unusual opportunities for the use of the marginal analysis by both the integrated firms producing primary metal and the secondary smelters producing secondary ingot from scrap. The opportunities for the use of marginal analysis were 'unusual' because the integrated firms pursued a stable price policy for primary aluminum in a period in which prices in general were not stable. The stable price policy for primary aluminum on occasion resulted in situations in which the prices of secondary aluminum moved upward or downward by large percentages in relatively short periods. The purpose of this article is to explore some of the reasons for the behavior of aluminum prices in the period 1946-195I and to discuss the implications of the market structure for the price-output decisions of both the integrated firms and the producers of secondary aluminum. The analysis was originally developed in connection with the behavior of the aluminum scrap market and the use which a vertically integrated producer might make of scrap in its own operation. The analysis had to be expanded to include the behavior of secondary producers, for they compete with the integrated firms for both raw material (scrap) and in the finished product (ingot) market. Although the major theoretical and operating problems of this analysis center around the nature of the competition between the integrated producers and the secondary smelters, a brief description of the post-war developments in the primary aluminum industry and the distinction between the primary and secondary operations constitutes necessary background for the development of a theory of behavior by each type of firm in the markets in which, they compete.

The bessemer converter process

IN the first half of this two-part article, the author last month reviewed the early history of the pneumatic converter process, investment costs, phosphorus and sulphur limitations, scrap market conditions and deoxidation of various elements. Herein, technological developments are described, as well as oxygen-enriched blast, end-point evaluation and temperature control.

Pig Iron and Scrap Prices during Business Cycles

THE following paper presents an analysis of the relative price movements of the two most important raw materials used the manufacture of iron and steel products. The place of pig iron in the industry is well known. The place of scrap or recovered metal is little understood outside the trade itself. The market for scrap is nearly coextensive with that for pig. Since scrap is naturally of a very high iron content, it is a strong competitor of pig iron the large producing centers and a partial or complete substitute on the Atlantic seaboard and the west. Indeed some sections of the country are able to maintain a considerable industry without any resort to pig iron a,s a raw material. There has grown up a large industry connected with the collection and preparation of scrap, some firms having a capital of over a million dollars and an annual business of over fifty millions. Of the total scrap products estimated to be worth about four hundred millions annually about one half is handled by middlemen, the other half passes directly from the producing to the consuming plant or is consumed the plant where it originates. Since it is usual for wholesalers or brokers not only to finance the small country collector but to extend credit to the consuming mills, any price change which may occur is a matter of importance for their credit relations. The real significance of the fluctuations of scrap and iron prices is, however, best understood when it is realized that the proportion of scrap and pig used iron and steel works depends quite as much on their relative prices as on the technique of the industry. A typical charge for the basic open-hearth furnace is six tons iron scrap, thirty-two tons steel scrap, and thirty-six tons pig iron; but the charge may vary within very wide limits, sometimes pig and ore, sometimes pig and scrap, or even all scrap. The fundamental limitation on the use of scrap, namely some slight uncertainty as to its analysis, is not a dominant consideration so flexible a process as the open-hearth. A change the price of pig iron disproportionate to the change scrap may, therefore, make a considerable difference the proportions used. In foundry practice the same alternative is found, although work of the highest quality there is not great latitude for varying the materials. Rolling mills also make extensive use of scrap for rerolling or for piling, heating to a welding heat, and rolling into bars. Only the production of crucible steel, malleable castings and a few special products is there a real lack of flexibility the uses to which scrap may be put. Therefore, a large part of the iron and steel industry watches with care not only the cyclical changes the price of its raw materials but also the differences which from time to time appear between them.