BIR World Mirror Non-Ferrous May 2015

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.

The ‘main event’ in the non-ferrous scrap trade over recent weeks has been the announcement, postponement and redrafting of procedures governing the pre-shipment inspection of metal scrap bound for India, a country where 70% of secondary non-ferrous production depends on imported scrap. 

Under the original proposals, there had been a requirement to video various stages of the container loading and sealing process, but the new terms announced on May 18 allow photos to be taken as an alternative (further details of the new rules appear in the May 19 news story on the Recycling International website).

The recent uncertainty in India served to disrupt non-ferrous imports, including from the Middle East where markets have been generally stable of late amid a steady supply of non-ferrous scrap. Notably in the Gulf Cooperation Council region, major infrastructure projects – including preparations for the Qatar football World Cup in 2022 and the 2020 World Expo in Dubai – are continuing to boost supply.

More than 400,000 tonnes of copper units were reportedly imported into China in March, an increase of 40% from February’s 280,000 tonnes which was the lowest monthly total since mid-2011. With China’s copper demand climbing only 0.7% in the first quarter of 2015, there is a school of thought that full-year growth could be as low as 4%.

On the aluminium scrap side, buyers are pointing to difficulties with cash flow. Chinese secondary smelters raised ADC12 offers to Japan by US$ 30-40 per ton in April owing to the higher cost of Zorba imported from the USA and from Europe.

However, the price of ADC12 aluminium alloy in Japan itself remained unchanged. In the USA, the Midwest premium on aluminium has dropped almost 40% from its highs, with UBC and other alloys now tumbling in price. Indeed, UBCs are now said to be worth less than Twitch while mills are booked for the next two months.

The continuing ‘downcycle’ in post-consumer scrap availability within Mexico has now coincided with the virtual disappearance of demand for mill grade scrap ‘as consumers prefer to watch the drop in the Midwest premium from the sidelines’.

Securing orders and delivery appointments has become ‘increasingly challenging’, while some Mexican yards are choosing to hold on to material rather to sell at lower prices. Relatively low levels of industrial activity in South Africa have led to a shortage of suitable scrap, for which prices have increased ‘dramatically’ and are close to export levels.

Meanwhile, copper and brass scrap is still being exported with or without permits, prompting renewed calls for an overhaul of the International Trade Administration Commission system. Also in the southern hemisphere, metal merchants’ volumes remain steady in Australia and New Zealand.

On the other side of the world, the government in Russia appears to have been persuaded by scrap industry representatives, including BIR ambassadors, to drop plans to implement restrictions on scrap exports.

Heading further west, recent weeks have been relatively quiet for the non-ferrous sector in Italy, with only lead and zinc generating more interest because of the strength of the galvanising and automotive sectors. ‘But despite strong demand from the automotive industry, aluminium prices and sales of scrap have not been as invigorated as the scrap industry had expected, leaving recyclers to accept only very limited price increases,’ it is reported.

Conditions for the scrap industry in France are described as ‘slack’. Supplies are available but demand is ‘very low’, especially from within Europe and also from China. On a more positive note, exports ‘continue to be supported by exchange rates’.

From the Nordic Countries, it is confirmed that quite good demand is coming from German buyers for both primary and secondary aluminium. ‘However,’ it is added, ‘during the last couple of months, the strong US dollar has supported the export of secondary aluminium to India and China.’