BIR CONVENTION: Bracing for Austerity

European voters as well as many elected officials on that continent are beginning to ask if there is something “beside austerity” that can help revive Europe’s economy, according to Marco Valli, an economist who addressed attendees of the Non-Ferrous Division meeting at the 2012 Bureau of International Recycling (BIR) World Recycling Convention.

Loretta ForelliValli, Chief Eurozone Economist at Italy-based UniCredit Group, was one of three guest speakers at the Non-Ferrous Division meeting, held May 30 in Rome. He noted that Italian Prime Minister Mario Monti “had to start with tough [austerity] measures,” but that “the debate is shifting—there must be something beside austerity.”

Fellow guest speaker Loretta Forelli, co-owner of Italy-based brass ingot maker Forelli Group, also questioned whether austerity alone could pull Western Europe out of the doldrums. “Is austerity a dog chasing its own tail?” she asked.

UniCredit’s Valli predicted that the developed world would suffer the most “if things turn sour” for the European monetary union, while emerging markets would be less affected. He predicted that growth in emerging markets would mean the copper market “will remain well supported at least this year,” although increased supply could push prices lower in 2013.

UniCredit is forecasting an average copper price of $ 8,400 per metric ton for 2012 and $8,200 per metric ton for 2013. For aluminum, the Italian banking group sees an average 2012 price of $2,275 per metric ton and $2,450 per metric ton for 2013.

Protectionism was another topic of concern for guest speakers and for Non-Ferrous Division members who offered remarks. Forelli stated that “protectionism will not work” because it inevitably provokes counter measures. Rather than erecting barriers, there is a need for “coordinated, regulated and balanced” free trade, she indicated.

BIR Non-Ferrous Division Senior Vice President Peter Dahmen of Germany-based Metallhandelsgesellschaft Schoof & Haslacher mbH & Co., declared, “We need free and fair trade.”

In order to support its fight against protectionism, the BIR Non-Ferrous Division board is asking metals research firm CRU, London, to conduct “a detailed worldwide study on nonferrous scrap, its consumption in different countries, areas and regions of the world, and the scrap flows around the world,” said Dahmen.

Guest speaker Shigenori Hayashi of Japan’s Daiki Aluminium Industry Co. Ltd. said the aluminum alloys market in Japan “may well shrink further” because it is facing new competition from China and other East Asian nations.

China’s aluminum producers have been “actively investing,” potentially boosting their annual capacity by more than 1 million metric tons, Hayashi noted.

Anton van Genuchten of Netherlands-based Reukema Blocq & Maneschijn BV, pointed to “scarce supply” in Europe as the leading factor that is limiting downward pressure on scrap prices even while demand from within Europe has stalled.

The 2012 BIR World Recycling Convention was May 30-June 1 at the Rome Cavalieri Hotel in Italy.