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    Market Segment

    July 22, 2022

    SDI's $2.2B Rolling Mill Project Will Reshape Aluminum Scrap

    Written by Greg Wittbecker

    Backward physical integration comes to the aluminum rolling industry

    SDI’s decision to “jump the fence” and enter the aluminum rolling sector was, in and of itself, blockbuster news. However, the repercussions on the aluminum scrap market may be even more profound. CRU has argued for some time that the big aluminum rolling mills would eventually borrow from the SDI and Nucor business model and embrace backward physical integration. These companies’ purchases of Omnisource and The David Joseph Company, respectively, in 2008 enabled both steel companies to gain more direct physical control of their scrap feedstock. These companies’ footprint in auto shredding and other steel origination “across the scale” have been major contributors to their bottom-line success. SDI, for example, reported that Omnisource secured 42% of their ferrous supply during fiscal year 2021. That surety of supply is a big plus.

    Greg Wittbecker

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    Price on trade: Steel industry trick-or-treat

    It’s the scariest time of year in Washington, D.C. … election season. The city is a veritable haunted house of prognostication and speculation as everyone tries to discern which way the howling wind will blow. We’ll let the fortune tellers and prediction markets guess the outcomes of the midterms. What we do know is this: the steel industry has experienced its share of tricks and treats over the past few months. Below are a few notable steel tricks and treats this Halloween season.

    Drilling activity holds in the US, moves higher in Canada

    The latest tally of active drilling rigs held steady in the US for a fourth straight week, while activity rose further in Canada this week, according to oil and gas rig count data published by Baker Hughes. The US rig count remained unchanged at 603 rigs this week, maintaining a 17-month high. Compared with this time last year, 57 more rigs are in operation today. Canada’s count rose by six to 226 rigs this week, gaining ground for a second consecutive week. Activity is up from the same week of 2025, with 39 more rigs operating today.

    galvalume steel coil

    SMU Survey: Mill willingness to negotiate price at lowest levels since 2021

    The majority of steel buyers responding to our latest market survey reported that mills continue to hold a firm grip on prices. The share of buyers reporting that mills were negotiable fell this week to the lowest rate seen in over five years. Every two weeks, SMU surveys service center and manufacturer buyers asking if mills are negotiable on new spot sheet and plate orders. In this week’s survey, just 3% of respondents said mills were willing to talk price to secure an order (Figure 1). This is down 11 percentage points from our mid-October survey.

    Algoma’s losses narrow in Q3, but tariffs and EAF transition challenges remain

    Algoma’s net loss narrowed in the third quarter, but the company continues to be affected by US tariffs and the transition to electric-arc furnace (EAF) steelmaking. The Sault Ste. Marie, Ontario-based steelmaker reported a net loss of Canadian $129.6 million (USD$92.6 million) in the third quarter ended Sept. 30, narrowing 73% from CAD$485.1 million a year earlier. Net sales dropped 52% to CAD$249.4 million in the same comparison.