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Gloomy start to New Year for non-ferrous scrap

After a year in which base metals were the second-worst performing commodity, headwinds around the world continue to dog global trade in secondary metals.

According to the International Copper Study Group (ICSG), preliminary data released in January indicates that world copper mine production increased by approximately 1% over the first 11 months of 2023. Refined copper production increased by about 5.5% during the same period. Primary production was up 5% and secondary production from scrap was up 7%, mainly due to a rise in China. The ICSG data suggests a market deficit of about 152 000 tonnes.

On the London Metal Exchange (LME), which is important for Europe, metal prices have been moving in a fairly narrow range for months, although there is a downward trend for some metals. LME’s warehouse stocks reflect the state of metals quite well. Copper recently fell to 157 875 tonnes, while aluminum stocks rose to 555 225 tonnes.

Survey says…

The non-ferrous metal markets in Europe in particular are in a difficult position and prospects for the coming months remain bleak. The VDM business climate index, which reflects the mood of European metal traders and metal recyclers, was gloomier than ever.

The business situation for metal trading has barely improved at the beginning of the year compared to the previous quarter. Only 4% of those surveyed reported an improvement and 25% reported a deterioration in the economic situation. The vast majority, 71%, sees the business situation as unchanged.

However, metal traders’ expectations of economic development in the next three months are somewhat more optimistic than in the previous quarter: 20% of the companies surveyed are now optimistic about the course of the new quarter. Only 25% of companies expect their business situation to worsen.

The rest (55%) assume that economic development will stagnate at the existing level over the next three months.

Optimistic Radius

Radius Recycling, the new look for Schnitzer Steel Industries, has reported tighter supply flows for recycled metals which, together with lower average net selling prices for its products, resulted in a compression of metal spreads. The outlook came in the US company’s Q1 report up to November 2023 which said market conditions for recycled metals ‘remained challenging during the quarter’.

However, non-ferrous production from Radius’ recovery technologies, and from an acquisition, contributed to a 12% increase in non-ferrous sales volumes year-on-year.

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