BIR – The following article is based on the latest Non-Ferrous World Mirror produced by the BIR world recycling body for the benefit of its members.
The impact of crime on the recycling sector is once again a prominent agenda item in several parts of the world. In Mexico for example, where secondary metals demand remains robust, the federal government has used the extraordinary powers designed to combat organised crime to initiate raids on scrap yards; many facilities have been temporarily shut down, with yard personnel and management detained. Against this uncertain and disruptive backdrop, recycling companies countrywide have been approaching government agencies in a bid to ensure a secure framework in which to operate.
Scrap thefts – including the hijacking of trucks and whole shipping containers – is still a major source of concern in South Africa. In the same country, the possible imposition of export duties remains under discussion; but in Russia, a proposal to limit the number of locations from where scrap can be shipped overseas appears to have been shelved for the moment, not least due to the lobbying efforts of domestic organisations and the BIR.
Among other transboundary shipment matters, customs authorities in China are said to be releasing scrap cargoes at a significantly slower pace in response to concerns over radioactivity in the aftermath of the Japanese earthquake. Several shipments found to contain low levels of radioactivity have been ordered out of Chinese territory for further cleaning.
Meanwhile, the widespread political unrest in the Middle East is continuing to put pressure on recycling operations in the region. The bulk of its scrap exports has remained destined for China and India owing to the fact that the majority of European mills have been fully stocked in the second quarter, especially in the case of copper.
In India, the domestic scrap market has encountered difficulty in aligning itself with the volatility on the LME, with the result that the majority of buyers have elected to purchase conservative volumes – and then largely on a spot basis. Market conditions in Australasia remain relatively weak, with many metal merchants reporting lighter volumes and a largely non-aggressive stance from their regular offshore markets.
The lack of export market aggression is also blamed in part for softer Zorba, Tense and Taint Tabor prices in the USA. On a more positive note, US car sales jumped 18% in April this year to 1.2 million units to give an annualised rate of 13.2 million. On the surface, this represents good news for domestic consumption of Twitch and yet prices had begun to decline even before the drop on the LME.
In Western Europe, the drop in copper prices has made supply more difficult to find while the secondary aluminium market has come under further pressure due to the dramatic events in Japan, as more material is coming into Europe. Feedback from France suggests all forms of brass rod scrap are proving quite easy to sell at decent prices; aluminium is going mainly for export into Asia where prices are quite good and demand is increasing, although the better qualities are still being bought by European end users at decent prices. Meanwhile, zinc scrap is attracting more interest from smelters than in the recent past while demand for battery lead remains significant.
According to reports from the UK, European copper refiners continue to be bought several months forward and terms are continually widening at a time when Chinese purchasing activity has been distinctly muted. Aluminium ingot prices have started to ease.
Looking ahead, the metals-related industrial sectors in the Nordic Countries are expected to perform well this year at increasing capacity utilisation rates. A recent survey conducted by VDM (the association of metal traders in Germany) suggests an equally bright domestic outlook in that country too, with 87% of respondents expecting positive market conditions to last throughout the year while a mere 9% have lowered their expectations since the previous poll was carried out. Some 56% of respondents described scrap supply as good and only 9% as difficult. Stocks of virgin and scrap metals were deemed to be in balance by 61% of the companies responding to the survey, with only 9% describing stocks as too low and 30% rating their inventories as high.