BIR Division President Sees Good Markets for Ferrous

During the Bureau of International Recycling’s spring meeting, Christian Rubach, president of BIR’s Ferrous Division, as well as the head of Germany’s Interseroh Hansa Recycling GmbH noted that the positive market last year should continue through this year.

Steel demand is expected to climb a further 5.9 percent this year - equivalent to some 65 million metric tons - and by a further 6.1 percent in 2008 to 1.251 billion metric tons. Chinese demand is predicted to surge 13 percent in 2007 and 10 percent in 2008 to reach 443 million metric tons, or 35 percent of the world total.

However, Rubach believed International Iron and Steel Institute forecasts for this year to be "at the low end". He noted: "World crude steel production has shown an increase of 10.2 percent in the 2007 first quarter compared to the same period in 2006. Nearly all major steel producing countries showed strong increases; only the United States had a weaker production."

Further growth in scrap demand would be underpinned in part by "strong investments in electric arc furnace capacity expansions on nearly all continents - especially in Russia, the Middle East and Turkey, but also in ‘old’ economies like Germany", observed the Ferrous Division President.

This positive message was echoed by Anton van Genuchten divisional VP of TSR GmbH & Co. KG in Germany. In his report on the European market, he calculated that EU-25 steelworks had consumed about 107 million metric tons of steel scrap last year - a record level and well ahead of the 101 million metric tons in 2005. EU-25 steel scrap exports also scaled new heights in rising 9.1 percent last year to 10.1 million metric tons; Turkey strengthened its position as the EU’s leading customer in increasing its order levels by almost 60 percent to more than 4.8 million metric tons.

Denis Ilatovskiy of Russia’s Mair Joint Stock Co., reported that domestic scrap consumption increased by 25 percent the first four months of 2007 response to the introduction of 12-15 million metric tons of new EAF capacity. Russian scrap collection had improved 20 percent over the same period owing to relatively mild winter weather; this had led to a small increase in exports although the trend was deemed unlikely to continue in the coming months. Ukrainian steel scrap collection was expected to increase slightly to 8 million metric tons in 2007 although the export proportion would be "negligible", according to Ilatovskiy.

Reporting on the U.S. market, divisional VP Jeremy Sutcliffe of Sims Group argued that a combination of factors had created "the distorted appearance that scrap is in surplus and readily available from many sources". He expected firming scrap prices given that "the world may consume up to 20 million metric tons more purchased scrap this year". And he added: "Buyers should view the present market as a brief buying opportunity."

The first of two guest speakers, Peter Albrecht of PricewaterhouseCoopers’ management board anticipated further consolidation within the world steel industry in both 2007 and 2008. Some 250 steel-related mergers and acquisitions in 2005 had been followed by a further 220 last year. But he added: "It seems there will always be a market for small niche players that use barriers to shipping to target specific markets."

Heinz Hetmeier, Director Trade Policy Division at Germany’s Federal Ministry of Economics and Technology, provided an insight into latest moves at the World Trade Organization (WTO) to tackle trade barriers. Under the current Doha Round of negotiations, he noted, the EU had tabled a proposal that would commit all WTO members to eliminate export taxes "if they are not justified by specific reasons".