German steel recyclers pessimistic about 2016

The Confederation of German steel recycling and waste management companies, BDSV, at its Annual Meeting in Magdeburg, Germany, released results of its member survey for 2016. The annual meeting was held 25-26 November 2015.

The association found in its survey of German steel recycling companies that 72 percent expect business conditions to worsen in 2016, and only 6 percent expect positive business development.

In addition to the drop in commodity prices, the survey indicates that companies fear the proliferation of government regulations and business pressures related to developments in China. Only 5 percent of companies surveyed said they are planning more new investments in the coming year.

BDSV Director General Dr. Rainer Cosson says, “The survey confirms the extremely tense situation in which the industry currently is.”

Cosson said the decline in iron ore prices and excess of competitive products on the market are putting Germany’s recycling industry under strong pressure. In addition, he said, member companies cannot tolerate additional legislative restrictions.

“The policy must be to decide whether they want to stand up for fair competition and the preservation of jobs or the already burdened companies in the recycling industry through additional bureaucratic obstacles,” he said.

According to BDSV, in the first half of 2015, foundries in Germany purchased almost 13 percent less scrap of which almost 4.5 percent has been attributed to steel mills. BDSV also determined that the average selling price of a ton of steel scrap (80/20 heavy melt) fell from around €226 in January 2015 to €137 in October of 2015.

In response to the difficult situations 33 percent of companies surveyed said they plan to reduce staff in the coming year. Only 2 percent of BDSV-member companies say they plan to hire employees in the coming year. Companies are similarly reticent about planned investments, with only 5 percent of companies indicating that they plan to invest more in the coming year, while 49 percent of the companies surveyed plan to roll back investments in 2016.