CMRA Forum: Blue Skies Can Turn Gray

Volatile copper pricing and a number of other business conditions have helped temper the overall optimism of the nonferrous metals industry, according to BIR (Bureau of International Recycling) Nonferrous Division President Bob Stein.

However, a number of global circumstances make it hard to be excessively gloomy, according to Stein, who also is vice president of nonferrous marketing with Alter Trading Co., St. Louis.

 In remarks prepared by Stein for the 2011 Secondary Metals International Forum, organized by the China Nonferrous Metals Industry Association Recycling Metal Branch (CMRA), but presented by fellow BIR Nonferrous Division board member David Chiao, he offered a recap of some of the optimistic forecasts being made at the outset of 2011.

“Some analysts were predicting a copper price of $11,000 per metric ton for [2011], with one U.K. bank going as far as to predict that the red metal would reach $13,000 per metric ton in the final quarter of [2011],” said Chiao, who also is vice president of Uni-All Group Ltd., Atlanta.

Sharp metals price drops in August are a reminder, said Chiao, that “the markets have become simply too jumpy—constantly unnerved by the slenderest sliver of positive [or] negative news.”

Continuing to deliver Stein’s prepared remarks, Chiao said, “While accepting that the world will suffer shocks along the way, the irrepressible rise of consumerism in developing countries will ensure that copper—and virtually any other raw material you can mention—will attract robust demand over the longer term.”

Although China has provided an abundance of this demand, Stein and Chiao added that other nations are waiting in the wings to buy scrap materials as their economies develop. “Let’s not forget India, which has become more involved with the import of higher grades of copper scrap,” said Chiao. “There is every reason to believe that if the wide difference in price between copper scrap and cathodes continues, then India will likely increase in its importance as an importer of copper scrap.”

While the world’s developing economies provide market strength, trade and regulatory barriers provide the current headaches, wrote Stein. “Trade barriers such as duties, quotas and outright bans run contrary to the principle of free and fair trade which the BIR has always espoused and which should over-arch our entire business,” said Chiao in reading Stein’s remarks.

The CMRA’s 11th Secondary Metals International Forum was in Guangzhou, China, Nov. 7-9, 2011.