Concerning the Japan tsunami.....

[CrazyTom]

As I have watched the mind blowing destructive power of the tsunami my thoughts have moved from the death and destruction to cleanup and rebuilding.

There are so many cars, boats and buildings scattered and strewn around that I can't help but think it will drive scrap prices down. I can see China hauling it all away in exchange for revenue needed to feed survivors and rebuild, or at least long enough until Japan can get electricity and services back on line.

The Japanese economy was suffering from the same baloney being foisted here. Debt is not an asset. Just like many of us sell scrap (which then mostly goes over seas) Japan would have to do the same. Their credit wouldn't be held by anyone right now.

All of the money that was invested in all of the things that are now only worth scrap metal will severely cripple any insurance if it covered an "act of God" like this (which I doubt).

Thoughts?

[hobo finds]

China and Japan are close by so I am sure all the scrap will go to china. Just like our scrap goes to China. Oil prices dropped when this disaster happened and like you said I think in the short term metal prices will drop mainly steel but others as well as the clean up happens.

[hobo finds]

The US should bring it back here and process it at our old steel mills and then re sell it to Japan! Why give it to China!

[thunter]

I think in the short run prices will go down but should recover when rebuilding starts to occur.

I was on the Oregon Coast this weekend and the tsunami really wrecked havoc in the Brookings, OR harbor and Crescent City harbor in Northern Cal. Docks were broken off sucked out to sea and came back in on the beach miles from the harbor. Interesting that a heavy cement dock that encases styrofoam can float so far so fast. Picture is of a dock from the Brookings harbor which came up on the beach sometime over the weekend.

We did find a 12 foot aluminum ladder on the beach among a lot of other stuff.

[theirrationalist]

I first would like to say, I feel very sympathetic to Japan. They have been rocked in a way that we really don't have much of a comparison to, other then September 11th. They have lost over 3x the number of people that we did in the terrorist attacks, and they have about half the population of our country. I feel for them.

Scrap prices will not go down any more then they would had this not happened. In about a month or so, prices will go up because they will need to rebuild. I think you guys are over estimating the effect that the scrap supply has on metal prices, especially scrap collected overseas. Much of the scrap we sell in the US gets sold back to US refineries. In general this will have a positive effect on the US economy, which is an ally with Japan. Unlike China, which has been wishing this type of thing on Japan for awhile. (Well, what I mean is they don't like Japan.)

And a common misconception: the US doesn't send all our iron and steel scrap to China. We only send about 15%. In fact, even in the middle of the recession, we still consumed over 74% of our scrap steel. http://minerals.usgs.gov/minerals/pubs/ ... -fescr.pdf

[CrazyTom]

I first would like to say, I feel very sympathetic to Japan. They have been rocked in a way that we really don't have much of a comparison to, other then September 11th. They have lost over 3x the number of people that we did in the terrorist attacks, and they have about half the population of our country. I feel for them.

Scrap prices will not go down any more then they would had this not happened. In about a month or so, prices will go up because they will need to rebuild. I think you guys are over estimating the effect that the scrap supply has on metal prices, especially scrap collected overseas. Much of the scrap we sell in the US gets sold back to US refineries. In general this will have a positive effect on the US economy, which is an ally with Japan. Unlike China, which has been wishing this type of thing on Japan for awhile. (Well, what I mean is they don't like Japan.)

And a common misconception: the US doesn't send all our iron and steel scrap to China. We only send about 15%. In fact, even in the middle of the recession, we still consumed over 74% of our scrap steel. http://minerals.usgs.gov/minerals/pubs/ ... -fescr.pdf

That is encouraging news. A local talking head says Japan may sell off gold to raise revenue pushing gold's price down.