Ferrous scrap riding ‘a roller-coaster’

Germany – The recent surge in ferrous scrap prices ‘did not last long enough to adequately repair the collection system’, BIR ferrous division president William Schmiedel of Sims Metal Management told the body’s latest meeting in Berlin last week.

Over recent ‘roller-coaster’ months, sales of HMS to Turkish mills had ranged from lows of around US$ 175 per tonne to well beyond US$ 300. A subsequent lull in trading activity meant that the next stop-off point for prices was ‘as yet unknown’, he told delegates. And Schmiedel also emphasised how the huge number of contracts being traded on China’s futures exchanges was adding to uncertainty in the physical market.

In his regional review of the ferrous markets, Tom Bird of UK-based Mettalis Recycling noted that some major buyers, including Tokyo Steel in Japan, had implemented significant ferrous scrap price reductions in May and that further cuts should be anticipated in leading markets for June. However, he also expected ‘a brighter market’ and greater stability later into this year.

Jason Schenker, founder and president of leading commodity and financial research firm Prestige Economics of the USA, spoke of ‘a recession of confidence’ and suggested the International Monetary Fund’s forecast of 6.5% real GDP growth in China for 2016 was unrealistically high.

Recycling International will run a full report on the BIR Berlin convention in the upcoming June/July issue.