‘Don’t interfere with free trade’

Market participants fear the consequences of comprehensive and heavy US tariffs as well as moves in Europe to restrict scrap metal exports.

Markets in the second quarter of the year have been closely watching developments in policy and regulation. President Donald Trump’s heavy dose of tariffs on US imports and a potential ban on the export of scrap from Europe could both have wide-reaching consequences – although non-ferrous metals were included in the list of materials exempt from tariffs. Aluminium is not included in the 2 April (‘Liberation Day’) tariffs as it is covered by earlier tariffs.

Global and regional recycling associations, on the other hand, advocate the preservation of free and fair world trade and have been registering their concerns. One industry initiative – heavily supported by European Aluminium – to ban the export of metal scrap from the EU is causing anger in the European recycling fraternity. Comments from market participants range from ‘not thought through’ to ‘pure protectionism’.

Meanwhile, the European scrap market is heated. The supply of scrap is currently strained, scrap is relatively scarce and remains expensive. Nevertheless, anyone willing to pay market-based prices can stock up.

‘LEAVE US ALONE’

The German recycling associations bvse and VDM are clear on political interventions. ‘Current efforts under the EU’s Steel and Metals Action Plan to establish further export restrictions for steel and metal scrap in Europe fundamentally interfere with open markets and endanger the circular economy,’ they say in a joint statement.

‘They do not serve to secure raw materials but primarily serve the protectionist interests of the European steel and aluminum industry to secure raw materials at more favourable conditions through government-imposed market closures.’

The trade bodies add that export restrictions will have far-reaching negative effects on European recyclers and metal traders who will have made significant investments in sustainable processing.

‘While the EU advocates for open markets in global negotiations and criticises export restrictions imposed by other countries, such measures lead to the isolation of countries with which we maintain good trade relations. Furthermore, there is no guarantee that all recycled metals will be processed in the EU and purchased by European industry at non-discriminatory prices. This poses a massive threat to the existence of the steel and metal recycling industry.’

VDM and bvse argue that without reliable sales markets and fair pricing, companies in the recycling sector face declining collection rates, economic losses, and a massive decline in innovation, even leading to bankruptcies – with drastic consequences for jobs, investments, and European raw material security. A loss of circularity is seen as an inevitable consequence.

MALAY CRACKDOWN

Malaysian ports have been congested with authorities cracking down on illegal import shipments of e-scrap, according to Fastmarkets. Raids by Malaysian authorities in Penang, Perak and Johor in March are being seen as a move to combat illegal e-scrap recycling operations.

Following Malaysia’s introduction of strict purity limits on aluminium scrap imports since 2021, secondary smelters have been leaving Malaysia for countries such as Thailand.

FM reported suggestions that aluminium scrap imports into Thailand could be restricted with some market participants suggesting imports be limited only to end-users based in the country. According to FM, such a measure would target illegal Chinese traders importing off-grade material.

GOING PUBLIC

Jain Resource Recycling, said to be India’s largest and fastest-growing non-ferrous metal recycling business, has set out plans for an initial public offering. It is part of the Jain Metal Group which dates back seven decades in the metals trade and is seen as a pioneer in the recycling and production of non-ferrous metals in India.

Jain Resource Recycling is primarily focused on the manufacture of non-ferrous metal products through the recycling of non-ferrous metal scrap. The company’s product portfolio comprises lead and lead alloy ingots, copper and copper ingots and aluminium and aluminium alloys.

Read the full non-ferrous market report in our upcoming issue >>