BIR Convention: Nonferrous Market Remains Demanding

A global economy fueled by rapid growth in Asia is continuing to place a strain on the ability of metals producers to satisfy a growing appetite for a variety of metals.

That was the message from delegates from around the world representing several different nonferrous metal markets who addressed the Non-Ferrous Metals Division session at the Bureau of International Recycling (BIR) Spring 2008 Convention.

Nonferrous scrap recyclers appear to be facing more of the same in the near future as far as being involved in active, high-priced markets.

One of the world’s fastest-growing markets for scrap, India, may not have even kicked into high gear, according to Uijwal Munjal of Rockman Industries and the Hero Group, a family of 20 companies based in India.

Referring to India as being “a few years behind China,” Munjal noted that India’s current consumption of metals such as aluminum and copper currently matches where China was at some point in the 1980s or 1990s.

He remarked that the “rapid growth in generation and distribution of electricity in India is the biggest driver of growth for aluminum consumption,” although he also pointed to construction, transportation and packaging as helping to fuel India’s 8 to 9 percent annual growth in that metal’s consumption.

Nonferrous smelter operator Everhard van der Straten of Belgium-based Metallo-Chimique NV expressed concern about global trade regulations, but noted that his company nonetheless recycled some 400,000 tonnes of nonferrous scrap in 2007.

In addition to increased demand from Asia, another growing source of scrap demand appears to be primary aluminium producers. Thomas Tumoscheit of Alcoa Europe noted that energy savings and emissions reduction incentives are causing Alcoa to shift toward melting more scrap. As a company, Alcoa purchased more than 1 million tonnes of scrap in 2007, compared to less than 690,000 tonnes in 2004.

The effect of all these factors led Robert Stein of Alter Trading in the United States to remark, “The era of cheap scrap has long passed.” Stein, who is currently president of the BIR’s Non-Ferrous Metals Division, added, “The need for metal units is, and will be, strong for the foreseeable future.”

Guest speaker Martin Abbott of the London Metal Exchange concurred that the market fundamentals are strong. Regarding the notion that speculation is behind global nonferrous price rises, Abbott remarked, “We do not create the market, we reflect it.” He commented, “If the LME price is ‘too high,’ people will deliver to the LME. [And] if it’s ‘too low,’ why wouldn’t [speculators] buy metal from the LME?”

The BIR 2008 World Recycling Convention & Exhibition took place in early June in Monte Carlo.