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BIR Non-Ferrous World Mirror June 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.

While importers in India – as well as scrap exporters across the globe – await further news from the country’s Directorate General of Foreign Trade (DGFT) about new pre-shipment inspection procedures, scrap business is said to be ‘gradually coming to a halt pending absolute clarity on the matter’. In addition to a validation process for pre-shipment inspection agencies both old and new, the rules ask for photos of container loading in a specified sequence ‘which will increase inspection times at yards and require more testing instruments’. The Metal Recycling Association of India is working with the DGFT on criteria to enable ‘secured yards’ to be exempted from the pre-shipment inspection certificate requirement.

The State Council in China is proposing business taxes for pollutants, solid waste and noise, with penalties for exceeding stipulated thresholds but also preferential treatment for those comfortably bettering the national standard. According to most recent figures, China’s refined copper consumption is expected to record a year-on-year increase of 4-5% this year after climbing 6.3% to 8.72 million tonnes in 2014.

Also on the regulatory front, the industrial community in Russia appeared to convince the government as recently as April not to limit exports of scrap metal. However, a new regulation has deemed many types of ferrous and non-ferrous scrap to be strategically important goods for domestic consumption, thus making it ‘very easy’ to halt exports without public discussion or other procedures. This comes at a time when the steep devaluation of the Russian currency has rendered the export option ‘very attractive’.

Elsewhere, aluminium scrap prices in Japan have dropped by 3-5% over the last month or so in response to a weaker LME. Scrap availability remains unchanged and local secondary smelters are continuing to seek more domestic raw material. Demand for basically all aluminium grades is ‘very robust’ in Mexico in light of orders from new automotive plants and their suppliers, thus offering early evidence that the country’s footprint as an aluminium scrap importer ‘will grow significantly’.

In the Middle East, falls in LME aluminium and copper put pressure on scrap prices ahead of the holy month of Ramadan which began on June 18 and generally brings a slower period for business. Activity levels are also lower in South Africa where raw material availability is sufficient and prices paid for scrap are close to what is achievable for export business. Copper and brass scrap are still being exported with or without export permits and under different tariff headings, fuelling the argument that ‘no-one is benefiting’ from the current International Trade Administration Commission system structure.

In the USA, there is still ‘not enough scrap metal available at a decent margin to make processors and brokers happy’. Non-ferrous metal prices are reasonably soft and premiums are continuing to fall. Many metal merchants in Australia and New Zealand are experiencing ‘feast and famine’, with very busy weeks interspersed with far quieter ones.

The non-ferrous scrap industry in France has been affected by the recent significant drop in LME prices. Supply is ‘really low’ and suppliers ‘prefer to keep back material for a time when returns are better’. While demand exists domestically, this is only for very high grade material. In the Nordic Countries, the drop in LME copper prices ‘has put a lid on scrap trading’ and activity levels are expected to remain relatively low over the summer months.

In Germany, the scrap markets are in balance but with falling prices. Copper scrap availability is currently high while the nickel market is dominated by an availability surplus for both alloyed scrap and nickel products. Zinc has seen increased demand from consuming industries.

Despite the general economic well-being in the UK, the domestic scrap industry is facing difficulties. The aluminium market has been ‘hardest hit’, with premiums reduced from their highs of US$ 520 down to US$ 170 – effectively removing premiums for most scrap grades. In general, scrap appears to be in short supply.

According to feedback from Italy, lead is the best-performing metal at present owing to higher car battery production. Copper scrap is suffering from low availability as dealers are holding back material amid unstable prices.

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