BIR Non-Ferrous Metals World Mirror March 2012

Global – Thefts from containers bound for ports in the south of China ‘are seemingly on the increase’, with the result that some insurers are now reluctant to issue cargo insurance or are threatening to increase their rates to the region. In addition, there is evidence of suppliers opting for alternative destinations.

There is claimed to have been an escalation in these thefts since the Chinese New Year, with some importers claiming losses in February alone amounting to hundreds of thousands of US dollars. In what appears to be an increasingly organised crime wave, the perpetrators are targeting high-value items such as No 1 and No 2 copper, as well as brass. In a bid to quantify and tackle the problem, BIR has called on its members to document cases where shortages appear to have been the result of theft, and to send the relevant information to the Brussels secretariat where it will be treated in the strictest confidence.

Meanwhile, it is reported that secondary metals markets in China have not been following the uptrend on the LME.

As for scrap theft in general, there is concern about ‘wrong-minded legislation’ often proposed to tackle this problem. From North America, for example, there is discussion as to whether cash purchases should be prohibited and tag-and-hold laws applied – something which ‘will only make the situation worse rather than better’, it is argued. Another major problem in this region surrounds the sourcing of scrap, with many yards reporting a 30-40% drop-off in buying levels compared to the end of 2011.

With theft reduction again in mind, there are officially unconfirmed reports that, in future, buyers of copper in South Africa will be required to be registered and members of accredited organisations such as the BIR-affiliated domestic body, the MRA. Furthermore, suppliers to these accredited buyers will be called on to declare each sale/delivery at a local police station in advance.

Due to price volatility, scrap flows and inventories at point of consumption have been subject to tight control in India; volumes of aluminium, brass and lead scrap have reportedly been good. India is the main export destination for lead scrap from the Middle East whereas the region’s copper scrap has been destined mainly for further east in Asia. Most of the Middle East’s suppliers are sitting on good quantities of aluminium scrap owing to weak domestic demand and unattractive export prices.

In South East Asia, clean-up efforts after the floods in Thailand have made more scrap available to the market. Across in New Zealand, the economy is showing signs of an improvement which has not been reflected in scrap metal tonnages whereas the economy in Australia is still slowing, thus hitting merchants’ volumes.

In Brazil, high-grade copper scrap and aluminium extrusion scrap prices are being put under pressure by stronger demand. And in Mexico, some consumers are offering premiums for immediate delivery in what is described as a ‘bullish’ market for aluminium scrap. For the red metals, however, Mexico’s exporters have been encountering ‘a lack of appetite among Chinese buyers for exposure’, characterised by more frequent claims over relatively tiny details and volumes. Also from Mexico, there are reports of some shut-downs of smaller operations by state and municipal authorities owing to lack of permits and non-compliance with other regulations.

After a busy January, the markets in Western Europe have become ‘far more subdued’, with lower volumes and ‘gloomy’ sentiment – not least because of caution among Chinese buyers. However, and as reported from the Nordic Countries, some positive signs of a recovery in the European economy have continued to emerge – despite continuing uncertainty within the Euro-zone.

In Germany, demand has been ‘at least satisfactory’ for nearly all forms of scrap, and prices have been generally at healthy levels. Meanwhile, feedback from France suggests a considerable improvement in demand for zinc and good orders from aluminium consumers; however, plenty of stainless steel scrap is to be found in yards following a slow-down in this sector. Non-ferrous metals consumers in Italy, meanwhile, have witnessed a disappointing year-on-year decline in orders for the early part of 2012.

Brass scrap is available because of a lack of demand from rod producers while the aluminium market is described as ‘quiet and dull’. In other news, restrictions have been applied since February 13 on scrap exports through the port of Vladivostok in the east of Russia, and a draft restriction decision with respect to the port of St Petersburg is under consideration by Vladimir Putin’s cabinet, thus tempering enthusiasm at the prospect of a progressive reduction in scrap export duties.

This article is based on the latest Non-Ferrous Metals World Mirror produced by the BIR world recycling organisation for the benefit of its members.

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