Page 22 from: November 2011

22 November 2011

Some gloom –
but no sense
of doom
Steel, iron ore and ferrous scrap prices have all suffered negative

side-effects from the latest dose of global economic gloom. However,

steel production rates have remained high while scrap has been slower

in coming forward, it was emphasised at the latest BIR Ferrous

Round-Table in Munich.

It would have been easy for speakers to dwell on the abundance of negatives rather than
on any of the positives when addressing the

Ferrous Round-Table meeting in Munich. But

in the event, delegates were provided with an

even-handed assessment of market prospects.

For example, the EU market report from Euro-

pean Ferrous Recovery and Recycling Federa-

tion (EFR) President Tom Bird of UK-based

Van Dalen Recycling tempered a frank analysis

of current market conditions with some ele-

ments offering greater grounds for optimism.

There is ‘considerable uncertainty’ for the final

quarter of 2011 as doom-laden media headlines

have been influencing sentiment ‘dramatically’,

he acknowledged. ‘With worries of recession

lurking in the background across the EU mar-

ket, there is a reluctance to speculate with sell-

ers looking to keep material moving. Similarly,

buyers are staying on the sidelines and not com-

mitting to large tonnages.’

But later in his presentation, the same speaker

underlined: ‘Business is still being done, reflect-

ing demand; and although prices are down,

levels are not as low as some were forecasting.’

Compared to the crisis of 2008, he added, ‘our

customers are also more robust, more consoli-

dated and far more likely to continue to per-

form in a falling marketplace’.

He concluded: ‘There is still a prevailing scarcity

of material. We are still in a positive position.’

This view found an echo in guest speaker Profes-

sor Dr Karl-Ulrich Köhler, Managing Director

and CEO of Tata Steel Europe, who predicted

that scrap would remain ‘structurally scarce’ and

so price levels would stay strong. However, there

would be some regional volatility, he added.

Rebound expected
The speech of Metz Corporation’s Hisatoshi

Kojo followed a similar pattern. He confirmed

that scrap prices had fallen ‘dramatically’ in most

regions of Japan over a very short period of time

and that the flow of material to export yards ‘has

also started slowing down’. But he went on to

predict that the Japanese scrap market would

touch the bottom by the end of October/early

November and rebound up to Yen 34 000-36 000

per tonne (US$ 441.55-467.50) towards the

January-March quarter ‘on the assumption that

a Greek financial crisis is avoided’.

Reviewing the US market, Blake Kelley of Sims

Metal Management pointed to trade predic-

B I R M U N I C H By Ian Martin

Ferrous

Christian Rubach:

‘There is an increasing number
of voices in the different

EU states and on the EU level
in Brussels asking

for export restrictions…’BIR Ferrous Division President
Christian Rubach.

Prof Dr Karl-Ulrich Köhler, CEO
of Tata Steel Europe.

Stefan Schilbe, Chief Economist
at HSBC. EFR President Tom Bird (left) and Zain Nathani of India.

p022_ e o .indd 22 07-11-11 11: