BIR Non Ferrous Mirror February 2009

Archiv – The following article is based on the latest Non-Ferrous World Mirror produced by the BIR world recycling body for the benefit of its members.BIR | The following article is based on the latest Non-Ferrous World Mirror produced by the BIR world recycling body for the benefit of its members.
Many eyes are turned towards China in the hope that its normally eager buyers will provide the spark to reignite the world’s non-ferrous metals markets. But while ’energy conservation and environmental protection’€™ feature on the list of project areas in which the country intends to invest in a bid to stimulate its economy, consumers in China have been worried by recent upward movements in the prices of some metals – not least because many of them are reportedly operating at below 60% capacity.
Price improvements have been aided by the decision of China’€™s National Resource Reserve Bureau to buy copper and aluminium, albeit within strict price ranges. According to feedback from India, a 25% consolidation in the copper price during the first quarter of this year has prompted more scrap buying activity; a steady upturn in sales of brass, aluminium and lead scrap has also been reported. Meanwhile, the Indian government has decided to make pre-shipment inspection by an approved agency mandatory for all scrap imports.
India has been one of the leading destinations for aluminium scrap from the Middle East, as well as for the region’€™s lead scrap and remelted ingots. Overall, scrap collection volumes in the Middle East grew approximately 15% in March when compared to the previous month, with lead battery collection volumes buoyed by the appreciation of LME lead.
This increase in volumes coming forward has not been universal. From the USA, it is reported that non-ferrous scrap collection business volume is still at 30-40% of what was considered normal last year. However, some additional business was conducted in mid-March based on the US dollar price increase.
Tight market conditions have persisted in Australasia where copper-based scrap has been enjoying high levels of demand against a backdrop of limited availability. For European consumers too, sourcing has become difficult in certain metals – not least because of the higher prices on offer from Asia. Reports from France, for instance, indicate that copper and brass are generally heading outside of Europe, with the country’€™s brass rod manufacturers struggling not only to sell their products but also to find enough scrap to make them in the first place. Also in France, demand for aluminium remains weak – with some refiners going bankrupt – while its lead battery market has continued to be highly active.
The non-ferrous trade in Germany has reported a slight recovery in demand for some metals during recent weeks although most consumers are remaining cautious and resorting to short-term rather than medium-term planning. Meanwhile, the government’€™s incentive scheme to encourage the public to scrap their old vehicles and buy new ones has led to a marked increase in small car sales.
In Italy too, leading consumers are watching prices rather than making long-term scrap purchasing commitments. Many scrap dealers are exporting a large proportion of their production, with the Far East markets helping to boost demand – and prices – for certain types of scrap. For the high grades of copper, for example, prices paid by domestic buyers remain some Euro 100-200 per tonne below those prevailing in the export market. Brass scrap is proving to be very scarce and is attracting high levels of competition.
In the UK, domestic demand for copper scrap has been further undermined by predictions that the all-important construction industry is likely to contract 9% this year. Overseas demand has been steady but, in response to the contract cancellations of the final quarter of 2008, export sellers have been demanding higher up-front deposits. Aluminium scrap has been the subject of some continued buying interest from India and the Far East while primary producers in the UK have started purchasing ‘€˜modest’€™ quantities. UK lead scrap prices have tightened to £100-140 per tonne under LME while stainless scrap remains expensive for consumers.
Despite strong demand from domestic mills and the elimination of import duties, Russia is not emerging as a buyer of non-ferrous scrap from overseas because of unattractive prices; domestic demand is particularly strong for copper scrap. Across in the Nordic Countries, meanwhile, Finland had been expected to record a less weak economic performance in 2009 compared to other countries in the region, but industrial production forecasts now suggest a steeper-than-expected decline of 3% for this year. This downturn is expected to hit metal-consuming industries harder than most.