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BIR Non-Ferrous World Mirror September 2014

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.

Following evidence of a number of recent ′multi-million dollar frauds′ whereby container loads of stainless steel scrap and copper scrap were found to comprise only concrete, ash, mud and dirt, the chairman of BIR′s International Trade Council has once again urged member companies to take great care when selecting trading partners.

Knowing your customer and your supplier ′has never been more important than it is today when trading scrap – especially non-ferrous′, insists Robert Voss CBE. ′The only ′′insurance′′ that we as traders can take out is to know the identity and practices of who is supplying the metal to which we put our name. And if a new supplier comes along, then visit him, watch containers being loaded and sealed, and even see them being taken to the relative safety of the ports.′

In trading terms, September has marked the return to work for many businesses following the summer holidays. In Europe, for example, prices and scrap supply have improved in Germany but demand ′remains hesitant′. September has begun with better volumes and higher price levels in France too following an August in which only India provided a source of reasonable demand for non-ferrous scrap.

The first half of last month was also ′particularly slow′ in terms of scrap supply for the Nordic Countries. Suppliers returned in the second half of August and quantities offered for September appear ′fair′. In the south of the continent, demand in Italy remains strong for copper and its alloys while aluminium movements have been helped by the improvement in car sales prior to the summer holidays. Stainless steel scrap has suffered as a result of weaker demand for finished product.

Across in the USA, higher prices have lured more aluminium scrap on to the market while copper scrap ′remained in good, steady supply′ during the course of the summer. Further south, the scrap market in Brazil is trying to adapt to low generation, low economic activity and poor credit conditions.

Demand is said to be higher for low-iron grades and UBCs but moving sideways for copper. Scrap availability remains limited in Mexico too, partly as a result of a sluggish economy, increased regulation and a heavier tax burden; however, demand remains ′robust′ for most of the grades consumed domestically, particularly UBC and 6063 aluminium for which imports are deemed likely to increase.

In Asia, India is still basking in ′a sense of buoyancy and positivity′ following the recent change of government and yet the secondary non-ferrous metals business continues to struggle with its operating margins and with liquidity tightness, not least because of intense international competition for good, imported raw materials and also because of overcapacity at home.

Government policies have triggered a cautious response from the business community in China where the proposal to reduce VAT on scrap metals has been rejected by Beijing′s Department of Finance. Meanwhile, aluminium scrap prices climbed US$ 130-150 per ton in Japan during the course of July and August owing to a strong LME and tight supply; the scrap market is expected to remain bullish here.

Despite the strife affecting many parts of the region, non-ferrous scrap markets in the Middle East have been largely stable, with notably steady demand for aluminium from India and Europe. In the southern hemisphere, utilisation levels among metal consumers have been relatively steady in Australia and New Zealand although their manufacturing sectors remain constrained, resulting in slower material inflows into merchants′ yards.

Meanwhile, September started quietly in South Africa and the scrap prices being paid are falling. Finalisation of modifications to the country’s export guidelines is still awaited; in the meantime, it is claimed that export permits for copper and brass scrap are being blocked by consumers and that copper ingots and billets are being produced by scrap dealers which are not being offered to local manufacturers.

Export duty reductions took effect in Russia from September 1 and the government has advised business of its support for any export development with respect to recyclables and secondary materials.

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