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BIR Non-Ferrous Metals World Mirror January 2013

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.

The start of a new year traditionally brings a resurgence of activity but business has been hampered to some extent by the generally slow flow of scrap.

In North America, for example, the weather is widely blamed for the lack of volume, even though conditions this winter have not been too harsh until very recently. Flows of copper, brass and stainless steel are described as low to moderate, while steel shredder operators are said to be encountering problems in accumulating the volumes required to operate in a cost-efficient manner, thus leading to ‘€˜aggressive pricing’€™ in most regions. Further south in Mexico, robust demand is reported for secondary-related scrap aluminium both at home and in the export market, but the challenge remains in ‘€˜securing incoming scrap flow’€™.

Across in Europe, there is also evidence of lower volumes available. In Italy, for example, where industrial production remains more than 40% shy of its normal levels, scrap is described as ‘€˜scarce’€™ in the home market while prices of imported scrap ‘€˜have become a problem following the strengthening of the Chinese market’€™. Lead and zinc scrap are faring better than copper grades, it is added.

Over recent weeks, the market in Germany for non-ferrous scrap has been termed ‘€˜rather poor and bumpy’€™, with some dealers managing to achieve only some 50% of their normal sales volumes. Bitterly cold weather/snow is one factor impacting collection volumes; another is the uncertainty surrounding future economic developments in Europe, although many experts believe 2013 will be, if anything, a better year than 2012. Forecasts from the Nordic Countries, for instance, suggest GDP growth figures could be 1-1.5 percentage points higher than last year.

According to feedback from France, copper scrap is remaining largely within Europe where prices are higher than export values to Asia. And for aluminium too, prices on offer from Asia have not been sufficiently attractive to persuade French exporters to ship out substantial tonnages – even though demand has been reasonably healthy.

Generally within Europe, 2013 began with a decent uptick in volumes sold and delivered following the end-year holidays – made up of material intentionally held back from before Christmas and of sales triggered by higher LME values. However, around the middle of January, traded volumes suffered a fall which was attributed in part to a substantial reduction in scrap availability.

‘€˜Heavy weather’€™ in Russia has also rendered non-ferrous scrap collections ‘€˜difficult’€™. In Kazakhstan, meanwhile, VAT on scrap was removed with effect from January 1.

Concerns over economic well-being are not confined to Europe. In answer to widespread fears over the ability of China to continue shouldering most of the burden for world growth, analysts expect the nation’€™s GDP to rise 7.5% to 7.7% this year. In the short term, however, trading activity will be constrained by the Chinese New Year holidays taking place on February 10-17. Some plants have already closed for the year and business will not resume in earnest until late February or early March.

Domestic secondary metal production has been sluggish in India over recent months. Demand for zinc has improved of late but activity in aluminium, brass and lead has been ‘€˜confined largely to conservative, consumer-based buying’€™. Recently, the bulk of India’€™s imported material has been coming from the Middle East, a region which has also shipped small volumes of No 1 copper to Europe.

To the south, the post-New Year period has seen ‘€˜brisk’€™ physical trading activity in South Africa. Scrap volumes have been ‘€˜consistent’€™ in Australasia, with domestic consumers and overseas buyers back in the market. And in Brazil, metal demand has been strong of late for packaging (UBC), primary grades of aluminium and for copper, whereas the automotive grades have been ‘€˜moving sideways’€™.

In the Pacific Rim, aluminium alloy producers in Japan are finding profitability elusive owing to the rise in scrap prices. Meanwhile, demand has been steady for non-ferrous metals in the ASEAN region. On the news front, the opening of a major can recycling plant in South Korea last October has led to a dramatic increase in the country’€™s imports of UBC scrap from Japan and ASEAN countries.

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