New hope for Germany's troubled Scrap industry?

GERMANY May 01 2016 10:13 AM

By Martijn Reintjes 

Metal recyclers in Germany have never judged their economic situation to be worse than it is at present, concludes metal traders federation VDM on the basis of a survey of its members. According to the industry body, 23% of responding companies said the present state of business was worse than in April 2015 and at its worst since 2013. 

A quarter of scrap firms foresaw a further downturn in business caused by the continuing weak performance of the whole industry. According to VDM, which represents some 80% of all German enterprises processing and trading non-ferrous scrap, ‘significant’ Chinese overcapacity, weak European industrial production and lower commodity prices have continued to challenge traders and recyclers.

‘However, there is no reason to be completely pessimistic,’ states VDM president Thomas Reuther. ‘There is light at the end of the tunnel. 13% of our members expect that the situation will improve in the upcoming months - at least 3% more than a few months ago.’

The survey also shows concern among 50% of recyclers in Germany about the ‘critical state’ of supply of non-ferrous scrap, with one-third anticipating that this trend will continue whereas only 9% expect an improvement in the situation. This outlook applies to copper as well as to aluminium and zinc.

‘In the course of production processes which are directed more and more towards sustainability, non-ferrous scrap is increasingly asked for; this leads to the impression that there is less scrap available,’ comments Reuther.

Taking into account the weak economic dynamics, 21% of traders are planning to reduce their inventories while 15% intend restocking during the second quarter of 2016, concludes the VDM summary.--Recycling International