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.
In what is already a difficult business environment resulting from, among other factors, Euro-zone debt worries and a slowing Chinese growth rate, scrap companies in certain parts of the world are also coming under pressure from authorities’ attempts to stamp out metals theft. In South Africa, for example, the revision to the Second Hand Goods Act has had the impact not only of reducing supplies of copper scrap but also of intensifying the monitoring of scrap movements by officials. As yet, however, no high-profile arrests have been made.
In Mexico, the domestic recycling industry is said to remain the focus of ‘constant persecution’ by the authorities. Already, some smaller operations and at least one major regional player have been forced to close down while other larger yards ‘are running well below capacity’. Meanwhile, demand for aluminium scrap in Mexico is described as ‘robust’, with the result that consumers are importing ever larger volumes in order to satisfy their needs.
Scrap generation – and also purchases – have reportedly dropped off in Brazil where ‘everyone is working with tight cash flows’. Prices have fallen for the automotive grades whereas UBC and primary grade values have headed in the opposite direction.
Staying with the BRIC nations, and as mentioned above, the overall economy in China continues to perform below expectations despite recent news of a 10% increase in domestic vehicle production. Notably, infrastructure projects have been put on hold owing to a shortage of funding both from the municipal authorities as well as from central government.
The government in India has revised the country’s economic growth forecast to below 6.5% for the current fiscal year. Domestic demand for raw materials has been ‘very ordinary’ against a backdrop of automotive, construction, white goods and heavy engineering industries making adjustments to take account of lower consumer offtake.
The remaining BRIC nation, Russia, is in the midst of its most active period of the year; dismantling activity is said to be ‘strong’ and scrap is flowing freely into yards. Prices are ‘quite stable’ and payments from customers are ‘steady’.
High temperatures and the holy month of Ramadan have combined to slow down general business activity in the Middle East, including scrap collection which is expected to have dropped off around 40%. China and India have continued to be the major export outlets for the region’s non-ferrous scrap.
The flow of scrap into yards in North America is also ‘sluggish’ at present, although the decline from the norm is a less pronounced 15-20%. On the upside, domestic demand for aluminium is said to remain ‘healthy across the board’ despite the fact that many consuming facilities have implemented seasonal maintenance programmes. Latest statistics indicate that light vehicle sales in the USA are running almost 15% higher on a year-on-year basis.
There are few positives to report from Australasia where markets remain ‘soft’, sentiment ‘bearish’, volumes ‘noticeably down’ and traditional export markets ‘weak’. In Western Europe, meanwhile, the non-ferrous markets are burdened by uncertainty and by unhealthy fundamentals at a time when a large proportion of the region’s business community is closed for the summer holidays. ‘Payments seem to be delayed more and more, and claims are rising,’ it is observed. Discounts for copper are described as ‘very volatile’ while the brass market is under pressure because producers are finding difficulty in selling their end products.
The economy in Germany may be outperforming that of Europe as a whole but, even here, feelings of uncertainty have proved inescapable. Raw materials are continuing to be ordered, but buyers are generally limiting their purchases to those volumes needed to satisfy short-term production needs. Furthermore, exports to Asia have remained ‘weak’.
Feedback from France suggests mixed brass scrap is heading principally into Asian markets ‘where price levels are much higher than in Europe’. Conversely, zinc scrap is attracting reasonably healthy demand from within Europe because there is perceived to be no real alternative at competitive prices.
In Italy, industrial activity will generally resume in the final week of August ‘but the more pessimistic may extend the break’ into the first week of September because of the current business climate, it is suggested.
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