BIR – 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.
Despite on-going concerns over the outcome of the debt crisis in the Euro-zone and over the potential for any new economic setback to upset the business equilibrium, many markets have reported a reasonably brisk start to 2012 in terms of trading activity levels. However, the major consuming market of China has been somewhat lower key than normal because of the New Year holidays; trading resumed on January 30 but production among smelters and consumers is not expected to return to normal until nearer the middle of February. As a result, the physical market is expected remain quieter in the interim.
In South East Asia, buyers have been prepared largely to await market developments in the aftermath of the Chinese New Year, although relatively minor volumes of scrap have continued to be delivered into the region. It is hoped that local scrap demand will improve on news from a large automotive producer in Thailand that it will resume production in April; this follows flood-related disruption to assembly plants and supply of components.
Consumers in India have responded to ‘baffling’ market and exchange rate gyrations by adopting a ‘safety-first’ approach to buying. However, a recovery in the value of the rupee and China’s holiday-related absence from the market prompted Indian importers ‘to go bargain-hunting’ and fill up their short positions during January.
In another of the world’s fast-developing economies, namely Brazil, the non-ferrous industry is complaining of a ‘very weak’ start to 2012, with secondary aluminium producers looking to adjust scrap prices downwards in order to recover at least part of their margin. Domestic demand for the higher grades of copper is better than for the lower grades. In Mexico, meanwhile, tight scrap availability is forcing processors to ‘squeeze their margins to get whatever is out there’.
Incoming scrap flows have been freer in North America, not least because of the much milder winter compared to last year and strengthening of metals prices on the indexes. Domestic consumption levels appear generally healthy, with many aluminium consumers said to be producing at near-full capacities. Comments from the market include: ‘If we generated 10 times more Zorba, the consumers would want it.’ Scrap processors in the Middle East were also satisfied by developments in January, noting that quantities sourced were much higher than in the previous month and that international demand was good. China has been the main outlet for the region’s copper scrap while India has been the key overseas buyer of aluminium scrap, lead scrap and remelted lead.
Among those southern hemisphere markets returning from long summer holiday breaks, many – but not all – merchants in Australia and New Zealand have reported decent flows of material into their yards. In South Africa, meanwhile, some merchants remain reluctant to trade in burnt copper owing to concerns over the potential for ‘drastic’ changes in associated legislation.
In Western Europe as a whole, 2012 is said to have begun with ‘a flood of material coming to, and being demanded by, the market’. However, feedback from France suggests ‘there is still no real market for the usual grades like Birch/Cliff and similar’. Better qualities ‘are easier to sell’ but ‘at bigger discounts than in the last few months’. A lot more interest from zinc users in Europe and Asia is also reported.
From Italy comes the suggestion that ordinary lead scrap is being quoted at around Euro 1400 per tonne and is attracting regular sales. Demand for copper is described as ‘very weak’, a fact attributed principally to a lack of financial backing from the banks. Meanwhile, a ‘satisfying’ start to 2012 has been reported from Germany – although uncertainty still surrounds market prospects for the coming months. And in the Nordic Countries, the industrial outlook remains difficult ‘but is no longer deteriorating’.
The relatively mild winter weather has been by no means universal. Sub-zero temperatures in Russia, for example, has reduced the availability of scrap in recent times. On January 13, a customs order decreed that, among all of the country’s Far Eastern border points, the only one authorised for the export of scrap will be Magadan – a small port with allegedly limited infrastructure. The move is widely regarded as a barrier to trade.
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