Speaking to attendees at the Bureau of International Recycling (BIR) Ferrous Division meeting in Munich in October, Tom Bird of Van Dalen Recycling in the U.K. said encouragement should be derived from the fact that “business is still being done, reflecting demand,” and that although prices have fallen, current levels “are not as low as some were forecasting.”
Bird, who also is president of the European Ferrous Recovery and Recycling Federation (EFR),said compared to the crisis of 2008, “our customers are more robust, more consolidated and far more likely to continue to perform [even] in a falling marketplace.”
Indian steel production growth is likely to be restricted to from 5 to 6 percent in the current year rather than the 10 to 12 percent originally anticipated, reported Zain Nathani of the Nathani Group of Companies. Having noted that many of the country’s steel mills had cut production in response to lower iron ore availability, the speaker went on to say that India’s ferrous scrap imports fell a fraction below 4 million metric tons in the 2010/11 financial year, backing off from around 4.75 million metric tons in 2009/10.
In his report on Russia and the Ukraine, Andrey Moiseenko of Ukrmet Ltd. predicted that the latter of these two countries would “definitely” become an importer of scrap next year (principally from Russia and Kazakhstan), not least because of the development of domestic electric arc furnace production capacity.
Scrap supply was a theme running through many of the reports. Hisatoshi Kojo of Metz Corp. in Japan confirmed that scrap prices had fallen “dramatically” in most regions of Japan over a very short period of time and that the flow of material to export yards “has also started slowing down.” He concluded: “I personally anticipate the Japanese scrap market will touch the bottom by the end of October/early November and rebound up to Yen 34,000-36,000 per metric ton (US$ 441 to $467) toward the January-March quarter on the assumption that a Greek financial crisis is avoided.”
Scrap will remain “structurally scarce,” and so price levels will stay strong but with some regional volatility, according to guest speaker Professor Dr Karl-Ulrich Köhler, managing director and CEO of Tata Steel Europe.
Blake Kelley of Sims Metal Management in the United States remarked that iron ore and steel prices had been “drifting lower” but steel production “continues at high rates.” As for raw materials, steelmakers “will need to restock unless consumption truly decreases”, he contended. “The longer they delay, the more urgent their need.”
Fellow guest speaker Stefan Schilbe, chief economist at HSBC Trinkaus & Burkhardt AG, when asked whether the world was heading for recession replied that on balance he believed this would not happen, although he emphasized that a number of countries faced serious economic problems. “I don’t envisage strongly falling commodity prices anymore,” he added.
BIR Ferrous Division President Christian Rubach of Germany-based TSR Recycling expressed the fear that Europe’s status as a relatively “safe haven” for the free trade principle could come under threat in the not-too-distant future.
“There is an increasing number of voices in the different EU states and on the EU level in Brussels asking for export restrictions or at least export control and monitoring of scrap exports” - despite the fact that “there is a clear scrap surplus of 20 million to 30 million metric tons in the EU-27,” he commented. If scrap exports were to be blocked from the EU, there would be an immediate drop in prices and recycling rates, he warned the Ferrous Division meeting.
The 2011 BIR Autumn Round-Table Sessions were Oct. 23-25 in Munich.