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.
Conflict and geopolitical tensions have triggered nervousness and caution across the non-ferrous metals markets. And the recent protests in Hong Kong have created a specific concern for China, adding to worries over the domestic economy′s lack of momentum and the strong US dollar.
Meanwhile, it has been confirmed that Chinese non-ferrous scrap import permits (Category 6) are now to be issued by provincial governments rather than by central government. Latest statistics indicate a sharp drop in China′s imports of leading non-ferrous scraps: for example, customs officials in Shanghai – the destination for most Zorba – reported a year-on-year decline in incoming aluminium scrap volumes of 28% for the first nine months of 2014 while Tianjin recorded a fall of 48%.
There has also been a sizeable decline in overall volumes of secondary non-ferrous metals in India owing to weak demand, tightness in funds, low margins, reduced international prices of metals and currency fluctuations; best estimates put this drop-off at 10-15% over recent months. But on a more positive note and despite an escalation of local conflicts, scrap export volumes from the Middle East are said to have increased in the wake of Ramadan.
Staying in Asia, demand for aluminium alloy is described as ′healthy′ in Japan, with a year-on-year fall in car production offset by strong exports of powertrain-related parts to plants overseas. However, there is a concern that alloy demand will decline unless domestic sales improve.
In Latin America, the new president in Brazil will be confronted with high inflation and interest rates on taking office. Economic activity in the country is termed ′very slow′ and most scrap operations are believed to be holding large inventories. Problems also face operators in Mexico where stringent anti-money laundering regulations have prompted many banks to decline to work with the recycling sector and even to cancel existing accounts.
Domestic demand for aluminium scrap remains ′robust′, with uncertainty and volatility surrounding primary aluminium premiums ′incentivising the use of recycled material′. The word ′robust′ has also been employed to describe demand for most grades of non-ferrous scrap in the USA, and prices are ′steady in relation to terminal market values′.
In the southern hemisphere, the outlook for non-ferrous metals markets in the fourth quarter is seen as ′more promising′ in South Africa. Raw material availability is deemed ′sufficient′; meanwhile, a few export permits have been granted for copper scrap whereas aluminium scrap is being shipped overseas ′without any restrictions′.
Market conditions remain ′fickle′ in Australia and New Zealand although consumers are continuing to make purchases. In Europe, and following ′a September full of promise′, recycling business conditions in France have become ′extremely difficult′ owing to ′scarce′ purchases and tight margins. Customers have reportedly attempted to postpone deliveries and to focus simply on their immediate needs.
Scrap traders in Germany have echoed complaints about ‘small margins’, as well as the poor supply of scrap. In the Nordic Countries, supply of stainless has been adversely affected by nickel price movements. And in Italy, aluminium scrap is in demand – notably clean profile, litho sheets and single alloy grades ′which are not easily obtainable′ – while the lead market is termed ′as strong as ever′ with the car battery sector gearing itself for the winter season.
Since September, export duties imposed by Russia on many forms of non-ferrous metal have been clipped by a further five to 10 percentage points. However, the country′s small and medium-sized companies are generally opting to use scrap for remelting and selling finished products for which the duty is 5% instead of 30%. The current year is said to have yielded a significant improvement in Russia′s scrap export tonnages, notably for copper-content material.
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