Global – The following article is based on the latest Non-Ferrous Metals World Mirror produced by the BIR world recycling organisation for the benefit of its members.For the international non-ferrous scrap trade, concerns over recent weeks have been focused on the robustness of the Chinese economy, the recent erosion in LME copper quotations and the uncertainty created by tensions surrounding the Crimea.
The PMI in China slumped to an all-time low of 48.1 in March and the country’s non-ferrous prices are trading below COMEX and the LME, signifying that demand is still weak and commercial lending remains tight. Indeed, expectations are that the Beijing government will initiate stimulus initiatives at some point in the near future.
The effects of this situation have been noted in India, with a suggestion that ‘China’s buying dominance has eased slightly’ in recent times. From the USA, meanwhile, comes the contention that the US$ 30-50 per tonne drop-off in the Twitch price for April could be ‘short-lived’ if the Chinese government is accurate in its assertion that domestic economic growth should be maintained at ‘a reasonable pace’.
In the USA itself, copper is being offered only if the seller wants cash-flow whereas others are waiting for a market rebound, with the result that availability is ‘tight’ and yard stocks low. And in India, the actual results of elections will be known only in the middle of May but sentiment has already improved among businesses and households, helped by the strengthening of the rupee in relation to the US dollar. The non-ferrous scrap business has shown signs of improvement in India and availability of imported material has been ‘fairly good’.
In South Africa, many scrap dealers have been caught with expensive stock following the sudden drop on the LME, prompting them to hold on to inventory. Scrap dealers in Italy too are holding on to material bought at higher prices and are unwilling to sell until the LME has returned to higher levels. Here, battery lead remains particularly short in terms of supply.
Meanwhile, the crisis over Crimea is proving to be of particular concern to the Nordic Countries because of the potential threat to economic relations with neighbouring Russia. Within Russia, the non-ferrous market is witnessing stable demand and an increasing availability of scrap, helped by the large volumes emanating from major demolition projects.
Increased inflows of scrap have also been recorded by merchants in New Zealand as the financial year-end on March 31 is traditionally preceded by factory clear-outs. While overseas markets remain ‘challenging’, domestic consumers are continuing to buy and certain grades of material are in short supply.
In Japan, aluminium scrap supply has remained tight and the price high, but exports to China and South Korea have declined sharply since the beginning of this year. Meanwhile, confirmation that Alcoa will close another line in Brazil is thought likely to affect the domestic aluminium scrap market; pressure on prices is expected to grow as Novelis is starting up new lines in April that will use scrap as a raw material. Further north in Mexico, the uncertain implementation of fiscal changes has prompted some scrap yard operators and consumers to slow their trading activities, thus contributing to the low availability of scrap. Meanwhile, ‘heavy competition’ for non-ferrous scrap in the Middle East is making it ‘very difficult to increase volumes’.
Feedback from France indicates that some attractive prices have been paid for Birch/Cliff by consumers in Southern Europe but ‘almost no interest’ has been shown in mixed brass scrap. Zinc smelters are said to be paying decent prices for scrap while a high demand exists for lead batteries, although problems persist in finding material.
From Germany, it is reported that low LME quotations have made secondary aluminium scrap more abundant in the marketplace because smelters can also buy higher-quality scrap at relatively low prices. This means that refiners ‘can buy cheap scrap that was previously destined for primary smelters’.
For more information, visit: www.bir.org
Don't hesitate to contact us to share your input and ideas. Subscribe to the magazine or (free) newsletter.
Loading ...
