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.
For the secondary non-ferrous metals sector, the much-anticipated budget announcement in India late in February yielded a welcome reduction in Special Additional Duty from 4% to 2% on imports of copper, brass and aluminium. However, the inverted duty structure on account of imports of finished and semi-finished goods from free trade agreement countries was not addressed despite pre-budget requests from industry to this effect.
In China, meanwhile, the customary demand rebound following the Chinese New Year break was barely perceptible this year as figures continue to illustrate the country’ slowdown. For example, its copper scrap imports are believed to have slumped to their lowest level in a decade last year – and yet, even then, total incoming volumes for January 2015 were still a substantial 16% short of December 2014 levels. ‘Many of China’s copper scrap importers are bearish about the copper market this year or are forecasting soft demand,’ it is reported.
The non-ferrous market in the Middle East has been slower in March than in previous months as a result of volatile LME copper and aluminium values. However, volumes traded in the first quarter were sufficient to keep suppliers and exporters busy, creating optimism for ‘a steady flow of non-ferrous scrap and a healthier second quarter’.
South Africa is reporting a shortage of raw material because of relatively low levels of industry activity, with the result that scrap prices have pepped up in recent weeks. At the same time in the USA, Zorba production is slowing because of the difficulties encountered by domestic shredder operators in sourcing feedstock, with some of them said to be running at a mere 30-40% of capacity. With export buyers returning to the market after the Chinese New Year holiday, there is substantial upward pressure on Zorba and Twitch prices in the USA.
There has been increased demand from those aluminium smelters in Mexico that are supplying the automotive industry but, here too, extremely high prices are proving necessary in order to obtain scrap. ‘VAT price distortion in grades with a domestic demand is becoming more evident,’ it is also noted.
Regarding the automotive market in Japan, sales prices of ADC12 aluminium alloy for major vehicle manufacturers have tumbled US$ 70-80 per ton for April-to-June deliveries when compared to the previous quarter as a consequence of the weaker LME market. Metal merchants in New Zealand have been busy as scrap generators have been offloading stock and cleaning up in the run-up to the March 31 financial year-end. And their counterparts in Australia are reporting an improvement in trading conditions, with consumers active in the market.
In France too, reports indicate renewed buying activity by scrap consumers. However, prices remain quite low, discounts are high and margins continue to be pinched. From Germany, by contrast, the talk is of hesitant demand and of a scrap availability that is sufficient to meet market needs at present, in particular for copper scrap.
Scrap exports to Asia have remained weak for German suppliers, notably shipments to China. Conversely, scrap has remained ‘scarce’ in Italy despite the fact that consumers appear to be in need of material. Those looking to import scrap must be prepared to offer ‘attractive prices’ to foreign sellers whereas domestic suppliers are either short of material or prefer to limit their sales to those consumers who ‘buy and pay promptly for urgent requirements’.
The economy of Finland continues to struggle. In related currency developments, the Euro has depreciated against the US dollar, the pound and the Chinese yuan but has strengthened in relation to the Swedish krona and the Russian rouble, such that the Euro is supporting Finnish exports ‘only in certain directions’.
And in Russia, where the rouble is now stronger than at the beginning of the year and is becoming more stable, recycling industry representatives are continuing to actively advise the government against any inclination to ban scrap exports.