BIR Non-Ferrous World Mirror February 2016

Global – Changes have been mooted for AQSIQ licences covering imports of scrap into China, including most notably a proposal for licence validity to be extended from three to five years. And with regard to licence extensions, it has been proposed that any two or more changes involving address, legal person and title applicant should require re-application for a new certificate.

In China itself, meanwhile, nine large copper smelters have agreed to cut sales by as much as 200 000 tons in the first quarter of 2016 in a bid to counter low prices; this is in addition to an earlier decision to cut production by at least 350 000 tons this year. The smelters have also asked the government to stockpile copper to help support prices. As regards ADC12 aluminium alloy offered by smelters in China and Russia, meanwhile, prices were reportedly dropped by US$ 60-70 per ton in January because of a decline in contracts for exports to Japan.

Also in the east of Asia, scrap suppliers in Malaysia are said to be taking advantage of a weaker domestic currency to export, resulting in a tighter local market. 2016 has already brought the annual conference of the Metal Recycling Association of India, at which the government was asked to reconsider the import duties on scrap and also to ‘correct the fault lines in the free trade agreements which India has signed with various countries, allowing duty-free imports of finished goods at the cost of domestic manufacturing’.

Calls were also made for a focused ministry to nurture recycling industry growth, including establishing special recycling zones to improve collection, processing and output of secondary metals. In another development, a state-owned company has been given the go-ahead to establish the country’s first auto shredder. It has been a slow return to business in South Africa at the start of 2016 while volumes in Australia and New Zealand are still reduced ‘even for this typically slow period of the year’ amid ‘talk of more yard closures and cost-cutting by several merchants’.

Similarly in Germany, more shutdowns are envisaged owing to lower levels of profitability as an overcapacity of operational yards clashes with an estimated 40% slump in scrap availability when compared to previous years. Elsewhere in Europe, reports from the Benelux Countries suggest difficulty in sourcing material in a spot-driven market while physical aluminium remains short in the UK despite the light metal price bottoming out at the end of last year.

Supply of scrap has been relatively slow too in the Nordic Countries as lower prices – especially for copper and nickel-based metals – are convincing dealers to hold on to material. In other European developments, the leading recycler in France – Derichebourg Environnement – has acquired Galloo Paris and SLG, thereby bucking the general business trend of holding on tight to the purse strings.

And in Italy, February 2 saw the ‘Green Economy’ law come into force under which ferrous and non-ferrous metal recyclers who travel from place to place must enrol with the national register of authorised environmental companies. Red metal margins in the USA have stayed mostly level while Twitch and Zorba prices have risen on concerns over slow production and increased buying from export markets.

Further south in Mexico, there was no significant recovery in consumers’ demand for scrap in the early weeks of the year. Indeed, UBC has been heading to the USA whereas, just six months ago, it was ‘impossible to export’. More recently, enquiry levels for specific grades have increased not only from consumers in Mexico but also from abroad. However, many scrap yards in Mexico are said to be struggling with ‘a worrisome lack of liquidity’.

The USA, along with India and Europe, has provided the Middle East with increased orders for copper, aluminium and lead scrap, thereby making up for a reduction in demand from the east of Asia. Finally, it has been intimated that the government in Russia may halt exports of any scrap as a response to anti-dumping sanctions from the European Commission and Turkey for some metal products from China and Russia.

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.