BIR Non-Ferrous Metals World Mirror March 2013

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.

There is disquiet within the scrap industry in South Africa following the emergence of draft guidelines for the control of exports of scrap. Issued in the Government Gazette of January 25, the proposals suggest any scrap must first be offered to a local foundry at a price or price formula to be determined by the International Trade Administration Commission using Metal Bulletin levels as the basis. The offer should also be accompanied by a certificate from a metallurgical engineer confirming type, quantity and quality of scrap available and where it can be inspected.

‘This means that, in practical terms, a scrap dealer must pay to have his material certified, offer it to the local market at a price determined not by the free market but by a government-appointed body using potentially inaccurate, out-of-date information, and then wait for a period of time at risk before being able to confirm a sale,’ it is argued in the BIR Non-Ferrous Metals World Mirror. The BIR has written to the South African government to object to this proposed burden but its argument ‘is likely to fall on deaf ears’, it is feared.

In other regulation-related matters, metal trade associations in India have been unsuccessful in winning an exemption for manufacturers/importers of metal scrap from the 4% Special Additional Duty (SAD) which is applicable to most categories of ferrous and non-ferrous scrap. ‘This is not being considered for now,’ the World Mirror confirms.

In other developments, it is pointed out that many BIR members will be looking to renew their AQSIQ licences this year covering shipments to China. No changes to the previous application procedures have been announced to date, it is noted.

A theme common to many of the country/regional submissions to the latest BIR World Mirror is the lower volumes coming forward. In the USA, for example, the majority of scrap dealers are said to be holding ‘very little inventory’, with red metals in particular proving ‘hard to find’. Moving further south into Mexico, available non-ferrous scrap volumes have either stagnated or declined at a time of stable to reasonably fluid demand. And in Italy, scrap has become ‘very scarce’ owing to adverse weather conditions for collections and industrial production which is ‘down to about 50% of capacity’.

Many scrap merchants in Australia and New Zealand are also experiencing lower volumes and ‘generally more challenging’ trading conditions, with domestic currency strength hampering export opportunities. As for the Middle East, the blame for a recent fall in collection volumes is placed squarely on the drop in LME values. ‘Local suppliers are locking their stock in their yards until export prices match up again,’ it was observed.

However, Russia appears to be bucking the general trend as the return to milder weather conditions has tempted more scrap into the supply pipeline.

Elsewhere in the recycling world, primary grades of aluminium scrap such as extrusion are said to be experiencing strong demand in Brazil while the weaker yen has led to an upturn in exports of light metal scrap from Japan, with shipments to South Korea increasing ‘particularly rapidly’. In France, meanwhile, demand for lead batteries remains noticeably stronger than for most other materials because of the low incoming volumes and high levels of competition between refiners – to the extent that scrap yard operators are generally struggling to renew their stocks. By contrast, French copper works are holding sufficient inventory to make them reluctant buyers at present.

At this early stage of 2013, the economic outlook for the remainder of the year is summarised by the World Mirror submission for the Nordic Countries. The general view, it maintains, is that the year will become brighter than its predecessor as the world economy grows ‘at a faster rate than before’. It states: ‘Overall demand for commodities such as metals is forecast to gain strength with improving market sentiment; however, there are few indications of a recovery in market fundamentals until the latter half of the year.’