Sofia, Bulgaria, will host the South-East European Waste Management & Recycling Conference & Exhibition, Save the Planet, on April 13-15, 2011. A parallel event, the Seventh International Congress and Exhibition on Renewable Energy Sources & Energy and Efficiency, will be held at the same time.

The recent statement of Lakshmi Mittal, “The steel demand in the developed countries has still a long way to go before its recovery…. and... it will not be before the year 2015 that it will go back on its pre-crisis level,” seems to be clearly in contrast with the feeling of improvement of the U.S. and German economies. As a matter of fact, with Mittal’s statement transpires the danger that prices of raw materials, such as energy and food goods, could go out of control. This will trigger an inflationary spiral, which could increase the speed with which some countries are getting into debt in order to stimulate their economies. Even so, we still have to suffer and we are still exposed to serious risks in the coming months. The events in North Africa are only making this situation worse.

Generally speaking, the scrap markets have been predictably calm during the second half of January, after a short but strong flash, as buyers have taken a defensive position trying to resist the further growth of prices.

Also here in Italy, where scrap prices reached the highest level for a short time, they fell after 14 January, with a decrease of about €20 on the weekly domestic market. The January contracts from the EU suppliers have been settled by the domestic mills with about a €50 increase. The mills’ inventories are now better than before, thanks to heavy deliveries from scrap yards. Now demand and consumption seem to be well balanced. The arrivals by vessel have been about 25,000 tonnes of scrap, about 92,000 tonnes of pig iron and about 6,000 tonnes of HBI. Only about 6,000 tonnes of scrap has been exported to Turkey by vessels.

In January, the average prices reported per metric tonne delivered for new arising E8 was €380 in Italy and €390 in Germany. Shredded E40 was €380 in Italy and €385 in Germany. Demolition scrap E3 was €330 in Italy and €350 in Germany.

Prices in February seem to still be weak, but also heavily conditioned by the North Africa news and high-grade scrap shortages.

January has been the third month of important arrivals of pig iron or HBI to the ports and consequently both mills and trader inventories remain well recovered. Also in these markets, buyers assume a “wait and see” position, hoping for lower prices. Offers are now reported around $540 per tonne CIF (cost, insurance and freight) for March shipment. There have been very few HBI arrivals.

Higher steel products prices, not supported by significant growth in production or sales volumes, are not enough to say we have started a new positive trend.

Ruggero Alocci can be contacted at mail@alocci.com.
 

I think that in the beginning of the year there’s been ample activity, with some old stock probably wanting to leave the yards. Now, things are getting back to normal, subdued due to the fact that China has been out of the market for some time. The Chinese New Year stops a lot of activity in China and, of course, has a big influence on the market. We see also the enormous development that LME prices have made. People are very suspicious every time there is a big rise in prices. People are waiting to see if it holds and maintains. In general, stocks are low.

When we look to copper, the situation has become a little bit better. People can decide to hedge their material at the exchanges without being punished for taking their time. That means the pressure in the short term of getting rid of material is at least a little bit eased. I think aluminium is still in the doldrums. The market is well supplied so there are no shortages anywhere.

The weather in the later part of December and first part of January affected intake, but now temperatures are above freezing again for the last two weeks. That has really taken away old barriers in terms of the arisings. That has not been an influence.

Germany is doing well. Industrial production in Germany is good. Order books are full. We see that also the aluminium works, copper and so forth have full employment and full capacity. What is lacking is the consumer market. I think consumers are still cautious, so they are not doing a lot of replacement investment. We have had a lot of promotion programs in the last couple of years where we are taking back the old cars and being subsidized by the government. Those programs have all disappeared and that has had an effect on the sales of new cars. Year-over-year sales of cars in Western Europe are down. People replaced their cars in 2009 and 2010 because these subsidies from the government were there, but these all ended in the middle of 2010. Therefore, at the moment the car market is suffering a little bit because of that. Having said that, it is obvious that the car market in Asia is very active. We have people like Volkswagen, Audi, and BMW having 30-to-40% growth rates still in China, so that part is still growing.

I think markets have become quite in sync with reality. Where we are today is what real value is. We had been going through a time when stocks in China were very high. China was very much buying. That changed from the middle of last year with a lot of restrictions being brought in by the Chinese government. They have had a major effect on the buying power or the buying hunger of Chinese markets for scrap. Having said that, now stocks are pretty low. Therefore, I think there is no reason to be pessimistic. It is obviously linked to what the exchange price is for metal.

If I looked at a physical situation on the scrap market, stocks especially in copper and so on are pretty low.

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Anton van Genuchten of Reukema Recycling can be contacted at a.vangenuchten@reukema.com.

There was a slight slowdown at the beginning of 2011 following the Christmas holidays, but things picked up sharply as copper started going up on the LME. The export market has reached a standstill and has been there for a number of months now.

Even though Chinese buyers did come back and ask for offers on material, they probably bought material in the U.K; they didn’t buy from our domestic market. In fact, there’s been a correlation between the weakening of the U.S. dollar and LME pricing, and this has put scrap prices at a standstill. It has reached a level where domestic scrap prices are higher than what the Chinese are offering to buy the scrap CIF (cost, insurance and freight).

As of early February, it looked as if consumers in Italy were gradually increasing their purchasing prices, following the rise in LME copper pricing. On the other hand, copper was in strong demand until about mid-January Now things have quieted down and it looks as if all the European refineries have stopped asking for material, probably for the next one or two months. They are talking about new deliveries starting in early April. Consequently, this means that they might have to stop for all of February and maybe some part of March. I have a feeling it is because of the spreads.

Chinese scrap dealers were exporting to all these refineries and now have slowed down their purchases. Consequently, foreign scrap dealers have no intention of selling at the moment. Italian scrap dealers who want to buy scrap are increasing their spreads. Whoever wants to sell copper today wants to keep the price close to the LME, and buyers want to buy it at a higher spread so there is consequently very little movement going on.

Bronze ingots are going strong. Tin is holding up on the LME and so is nickel. It looks like the metals aren’t feeling much of the crisis, unless of course there is a lot of speculation behind it. At the end of the day it looks as if once the Chinese Year of the Rabbit is started, there is probably going to be a pickup in demand and prices [and] prices will gravitate toward the LME levels.

Aluminium scrap is in demand in Italy. It is mainly the cast and the taint/tabor as well as some profile scrap, some painted some unpainted. Those are the main items for the time being.
Fernando Duranti can be contacted at fernandoduranti@leghemetalli.it.