BIR: Wider use of primary and refined grades poses threat to scrap industry

By Carolina Curiel (ScrapMonster Author)

December 08, 2015 02:59:57 AM

BRUSSELS (Scrap Monster): The latest Non-Ferrous Metals World Mirror released by the Bureau of International Recycling (BIR) states that wider use of primary and refined grades pose big threat to traditional scrap industry.

Based on the observations at the recently concluded 2015 Annual Convention of the China Non-Ferrous Metals Industry Association Recycling Metals Branch (CMRA), David Chiao, President, BIR Non-Ferrous Metals Division noted that increasing number of non-ferrous alloy consumers in the country are found using primary and refined grades and copper cathodes in place of traditional scrap. The sharp decline in scrap usage poses big threat to the industry, he added.

The non-ferrous recycling sector around the world is passing through intense profitability crisis. Weak activity has led to fresh layoffs in the US, while margins are seen falling with every passing week. In Germany, scrap supplies have fallen significantly by nearly 30-40%. Many companies are reportedly managing to operate somehow, despite passing through tough financial situations.

The demand for certain grades of scrap has witnessed sharp fall in Mexico during recent times. Russia reported fall in scrap prices on account of drop in demand due to winter conditions. But scrap availability continues to remain at lower levels. Japanese aluminum scrap prices have dropped by as much as $70 per ton during the month of November alone, due to sufficient inventory levels at secondary smelters.

The continuing drop in oil prices and persisting geopolitical instability in the region has impacted scrap trade in the Middle East. Australasia reported modest scrap availability levels in the weeks leading to summer shutdowns during Christmas holiday season. Market conditions have not shown any significant improvement. France too has reported quiet market conditions ahead of holidays. Dealers prefer to hold stocks rather than selling at lower prices, market participants observed.