Glimmering Hope

Departments - Nonferrous

Scrap dealers may be writing off the end of 2012, but they appear to be holding out hope for the first quarter of 2013.

December 7, 2012
Recycling Today Staff

Scrap dealers may be writing off the end of 2012, but they appear to be holding out hope for the first quarter of 2013.

Despite hope earlier this year about growth in manufacturing activity, it looks more likely that manufacturing will be fairly flat through the end of the year. Manufacturing has held up OK across many sectors, though generation of new scrap, whether copper, aluminum or other nonferrous metals, has been muted.

The auto industry has been a bright spot, benefitting copper and aluminum producers, who have been able to sell more into these sectors.

However, copper scrap markets are somewhat soft at present. They are expected to remain in a holding pattern through the remainder of 2012, as many traditional consuming markets, such as the residential housing sector, continue to struggle. The energy sector also has slowed somewhat as of late after a fairly strong market earlier in 2012.

China continues to be the major focal point for scrap metal recyclers, whether they trade in ferrous or nonferrous metals. The consensus is that while the Chinese economy is still growing, it is doing so at a slower pace. One large nonferrous metal exporter says China’s 2012 GDP (gross domestic product) will show 7.4 percent growth. This is the lowest rate of growth the country has seen in more than 10 years. He adds that investments in China, including infrastructure projects, are declining as well, leading to a slowdown in the manufacturing sector.

Another factor that may affect copper scrap markets during the next several months is the change in the Chinese administration. The exporter says the new group of government leaders who took over in November likely will keep the economy in idle for a few more months. The exporter speculates that there may not be much in the way of export activity until after Chinese New Year in March 2013.

Another scrap dealer is bullish about China in terms of its consumption of nonferrous metals. He points to a stimulus plan introduced in that country that could help boost demand for copper and other nonferrous metals by early next year.

In early November, copper prices were heading downward, with a number of vendors saying buyers had pulled back on orders. A Midwestern scrap processor says many mills have decided to scale back their orders through the end of the year.

Aluminum prices have come down from earlier this fall. According to several sources, the upswing had nothing to do with market fundamentals.

The Midwestern scrap dealer says he is still seeing an adequate amount of aluminum coming across his scale but doesn’t expect to see a sharp increase in supply through the rest of 2012 and into first quarter of 2013.

The big problem grade right now is nickel/stainless, as operating rates at stainless steel mills are declining.

“Stainless is a dog right now,” a vendor says.

Stainless steel producers in Europe, the United States and China have been reducing their orders, with a source saying China has closed a significant number of its stainless steel mills. Additionally, the ongoing problems with the European economy are reducing demand for new stainless.


(More information on nonferrous metal markets is available at