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 a major change with global implications, the new leadership in China will assume its duties in January and is widely expected to commit to a more relaxed economic policy. In the same country, copper has been performing well over the last month or so whereas aluminium continues to trade in the same very narrow range.
In other developments of specific relevance to the international scrap community, a wave of metal thefts from scrap yards in recent weeks ‘seem to involve inside knowledge of the companies as well as the assumption of a slow and inefficient police response’, according to feedback from Mexico. Meanwhile, it has been argued that the customs union between Russia, Kazakhstan and Belorussia will become extremely helpful to scrap movements next year when taxation of scrap operations is harmonised. VAT will be removed for scrap in Kazakhstan, bringing it into line with the situation which has existed in Russia since 2008.
And in India, the domestic metals recycling industry has called on the government to rationalise certain duties on imported raw materials and allow specific concessions. At the same time, the country’s Directorate General of Foreign Trade has approved more applications from agencies, granting them power to issue pre-shipment inspection certificates.
Throughout most of the world, industry at large has been making its familiar preparations for the upcoming holiday period. In Australasia, merchants have been reporting an improved flow of material into their yards in the wake of higher prices and the pre-Christmas tradition of clearing factories ahead of the holidays.
Metal demand in Brazil declines at this time of year as most end users stop for holidays, while December is traditionally a short trading month in South Africa as most merchants and manufacturers close mid-month. In the case of the latter, recent activity in the market is described as ‘brisk’, with a slight increase in the availability of copper and aluminium over the last month.
In North America, UBC collections have witnessed their seasonal drop-off while lead prices have increased slightly of late. Capacity utilisation rates for secondary aluminium alloy producers in Japan is a mere 65-70% and a demand recovery in the short term is deemed unlikely. Owing to sluggish domestic orders for scrap, considerable volumes of aluminium scrap such as UBC have been exported to South Korea and China.
Outside the troubled parts of the Middle East, healthy volumes of scrap have been flowing into yards owing to LME price increases. Copper and aluminium are continuing to head to the Far East and India; high-grade copper shipments to Europe have been reduced by end-of-year holidays.
Several European countries have been providing good demand for copper scrap at decent price levels for December deliveries, according to feedback from France. At the same time, there is demand from European brass consumers for most grades. Aluminium values have been oscillating in recent weeks in line with the LME and scrap yards are said to be well stocked with light metal.
Sufficient scrap has been available to the market in Germany despite ‘choke points’ emerging every once in a while; with the generally lower scrap prices, many dealers have opted on occasions to hold on to their stock rather than to sell.
Across in Italy, demand is described as ‘erratic at times’; the slow-down in industrial production has meant a reduction of between 40 and 50% in the amount of scrap generated domestically. In general, copper is in demand, brass scrap prices have remained on the low side, while zinc and lead scrap are attracting regular but not strong demand.
There is some muted optimism for the coming year. From the Nordic Countries, for example, it is predicted that all the economies could experience growth some 1-1.5 percentage points higher than in 2012. Even though the future of the Euro-zone as a whole remains ‘fragile’, there is a widespread belief that the debt crisis has at least settled down, that ‘the worst is over’ and that the market will pick up in 2013.
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