‘Very limited’ non-ferrous scrap flows

Global – With typically US$ 50 a tonne lopped off the value of steel scrap in the USA this month, non-ferrous volumes have also continued to dwindle because of the impact on joint collections. ‘Pricing alone is not the issue any more,’ it is pointed out. ‘It is mainly about being able to find enough metal to process and trade in order to cover the operating costs of the recycling facilities. Most companies have exhausted their cost-cutting measures and the only option left may be head-count reductions.’

The story is similar in Europe. From the UK, it is reported that the ferrous market’s decline has had an immediate impact on supply to the non-ferrous trade, with light iron prices falling so low that metal is ‘not economically viable to collect’. France is witnessing ‘very limited’ flows as scrap collectors prefer to hold on to their stocks in the hope of better times to come.

Similarly in Germany, low copper prices are resulting in scrap dealers keeping back material they bought at a higher price, denting availability on the market at a time of good demand. On the other side of the globe too, metal merchants in Australia and New Zealand are reporting lower volumes and continued pressure on margins.

For the Middle East, supply pressures have been exacerbated by geopolitical issues and escalating conflicts in the region, resulting in reduced cross-border trading. Further in relation to this international supply picture, not much non-ferrous scrap is being exported from Russia despite decent collection volumes and the cut in export duties that took effect from September 1 this year. Domestic consumption is said to be stable.

In Asia, secondary aluminium smelters in China have been hit by ‘softer’ demand from end users, not only in terms of volume but also pricing. Copper processors are said to be reluctant to sell at a loss and end consumers are unwilling to take long positions, leading to ‘cautious’ but still active trading. An increasing number of Chinese smelters and processors are understood to be exploring other countries in which to continue their business and to position their investments.

‘Soft’ is also the adjective used to describe aluminium scrap prices in Japan although supply is still tight – with the exception of UBC – because of reduced generation. The secondary non-ferrous market in India is experiencing a ‘tough’ time characterised by thinner order books, shrinking operating margins and a tightening of liquidity. At the same time, the currency in Thailand has been losing value over the course of the last month, thereby thwarting some attempts to sell scrap into the country.

Elsewhere around the world, some aluminium scrap consumers in Mexico have reduced or even halted their buying activity, quoting a variety of reasons from furnace maintenance and cash-flow issues to cheap primary imports. Many scrap yards have therefore been left with significant tonnages purchased at levels ‘that made sense with domestic prices but no sense at all with the export market’.

In South Africa, many industrial operations are continuing to work shorter three- or four-day weeks in response to falling demand on both the domestic and export markets. Here, copper and brass scrap availability is said to be ‘sufficient’ to cope with the needs of a largely quiet consuming sector.

This article is based on the latest Non-Ferrous Metals World Mirror produced by the BIR world recycling organisation for the benefit of its members.