Protectionist Barriers Denounced at BIR Nonferrous Division Meeting

Market reports presented during BIR Round-Table Sessions in Barcelona

November 6, 2012
Recycling Today Staff

In the current “fragile” economic environment, some processors of nonferrous metals are complaining of “a lack of material to process” while consumers “are feeling pain at the prices they need to pay for our scrap to feed their furnaces,” it was acknowledged in Barcelona by Robert Stein of US-based Alter Trading.

BIR Nonferrous Division President Robert Stein.

Stein, who will stay on for an additional year as president of the BIR Nonferrous Metals Division, delivered these observations during the Nonferrous Division Meeting of the Bureau of International Recycling's (BIR) Autumn Round-Table Sessions, held in late October in Barcelona.

During his presentation, Stein said, “Consumers around the world need to understand that the international flow of scrap metal is not what is currently making scrap expensive; it’s a combination of underlying metals values coupled with a lower level of supply that is making a marked and negative impact.”

The scrap industry depends on the ability to buy and sell its material, “without the barriers of protectionism that many of our established domestic consumers promote,” Stein told attendees of the Nonferrous Metals Round-Table meeting. “Our scrap does and should continue to find its highest value at the discretion of the seller, and not by government regulations brought on by those who would seek in many ways to detract from our freedom to do so.”

Robert Voss of Voss International.

Protectionism has been a particular concern for the BIR’s International Trade Council but its chairman,  Robert Voss of Voss International in the U.K, opted to focus on the increasing problem of metals theft and fraud. Many insurance companies have shown understanding to date but it is likely to be “only a matter of time,” he warned, before they start to impose restrictions or higher costs on their clients in the metals recycling sector.

With analysts believing GDP growth in China could have been at a 20-year low of 7 percent in the third quarter, all of the country’s metals consumers have been adopting a “wait-and-see” attitude, it was noted by Andy Wahl of U.S.-based Newell Recycling of Atlanta in his review of world markets. In India too, industry and the overall economy “are facing some contraction.” From Mexico, meanwhile, there are rumors that VAT (value added tax) might be increased from 16% to 20%— a move which could lead to distortion of local scrap prices.

The BIR Nonferrous Metals Division has commissioned CRU Strategies, the international management consulting division of the CRU Group, to gather statistical data on nonferrous metals scrap flows, in particular for copper and aluminum, and some of the early findings were shared with delegates in Barcelona by the company’s managing consultant, Christopher Stobart. Stobart contended that the scrap industry within China will grow, and therefore, international scrap traders will ultimately need to look for “new, growing export markets” such as in India, Brazil and South East Asia.

Stobart ended on a positive note by suggesting, “The scrap industry can only become more important as the years go by in comparison with the primary mining, smelting and refining industry.”

Norberto Vidaña, EU Aluminum Purchasing Manager at global component producer Nemak, also devoted significant attention to China in his guest presentation on procurement strategy for the automotive casting business. The Asian giant’s emerging middle class will “drive” the increase in global light vehicle sales, with China expected to record annual growth of 9% between 2011 and 2016, he said.