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BIR Non-Ferrous World Mirror February 2015

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.

Ever-growing numbers of copper producers in China are said to be ‘bearish’ about near-term prospects for the red metal market despite forecasts that domestic consumption will rise 6% this year. And following heightened CCIC inspection procedures on the east coast of the USA, an increase in rejection rates has been reported.

Meanwhile, US secondary aluminium prices have slid a further US$ 20-40 per ton as secondaries appear to be holding sufficient scrap and ‘are waiting to sell the finished ingot inventory for the next quarter’. Prices of UBCs and other alloys have mirrored a slight drop in the Midwest premium.

Despite prices having fallen ‘dramatically’ in January, the aluminium scrap volumes generated and collected in Japan ‘have not been large enough’. Aluminium alloy prices are dropping more sharply than Zorba – the main raw material for ADC12 production. Conversely, there has been an improved supply and reasonable volumes of aluminium scrap traded in the Middle East, and the same applies to copper scrap. Traders’ confidence has improved sufficiently for them to sell available stock after the major correction in early January.

In New Zealand, a large proportion of scrap metal is exported and so its currency’s recent weakness in relation to the US dollar has helped metal merchants and consumers move material to some of the traditional offshore markets. Across in Australia, its dollar has been even weaker and the country’s metal merchants are still reporting generally quieter conditions.

The main issue in South Africa has been electricity load shedding and its impact on a wide spectrum of industries. At a time of sufficient raw material availability, the country’s International Trade Administration Commission has released its updated pricing structure for exports although it has been reported that overseas shipments of scrap are still taking place both with and without export permits.

The big concern in Mexico, meanwhile, is the impact of significantly lower steel scrap prices on non-ferrous scrap collections and processing. However, industrial scrap appears to be flowing into yards at a healthy pace.

Important political crossroads have been reached in both India and Brazil: in the case of the former, industry is hoping the February 28 budget will bring a host of pro-business measures; and the latter appears to be laying the groundwork for a shift to more sound fiscal, monetary and foreign exchange policies – even though this is likely to entail painful adjustments in terms of consumption, jobs and credit. In the immediate lead-up to the budget in India, demand from mbost of the country’s secondary metal-consuming industries has remained ‘subdued’.

In Europe, bronze scrap is among the grades that ‘are not easy to find’ in Italy, with consumers ‘struggling to purchase all of their requirements’. Lead scrap ‘seems to have disappeared from normal supply sources’ while aluminium scrap is described as ‘abundant’. The feedback from France suggests scrap buyers within Europe are prepared to purchase only small quantities at increasing discounts at a time when volumes are arriving at yards ‘in dribs and drabs’.

Long-haul export activity has also been slow, partly because of the impact of the Chinese New Year holidays across many parts of Asia. And in Germany, the scrap market has remained ‘disappointing’ in recent weeks given the combination of plentiful scrap availability and weak demand both at home and abroad.

Although Russia is a member of the World Trade Organization and its duties should therefore be gradually removed, there is now talk of the country wanting to protect its domestic scrap fund through the application of higher export duties. Scrap industry players are against such a move and have written to high-level state officials in a bid to protect themselves against the threat of ‘isolation’.

Among the Nordic Countries, economic trends remain healthy in Sweden and Norway but the central bank in Denmark has failed thus far in its concerted bid to keep the krone stable relative to the Euro such that expectations are of a further rate cut to -1%. Many experts believe the economy in Finland is in dire need of reform but no change is anticipated before the parliamentary election due in April.

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