Market Reports: Nonferrous, Western Europe

Market Report: Nonferrous Scrap, the Netherlands, Europe

Commentary by Boris Bronneberg, Source Montan Handels GmbH.

Business is still very quiet. Supply is limited, but the margins seem to be good.
Copper and copper-based alloys are still in demand.

With the summer holiday, many industries have shut down, and demolition and construction are at a standstill. Most every company will go back to work at the end of August. For now, auto sales have dropped along with housing starts.

Hopefully, by mid-September the supply of material will increase as companies replenish their inventories and building and demolition levels start back toward a normal level.

There is a strong demand in Germany for primary aluminium grades and stainless steel.

Boris Bronneberg can be contacted at boris@source-montan.de.

Market Report: Nonferrous, Italy

Commentary provided by Fernando Duranti, Leghe & Metalli International.

There has been very little business going on for the last month or so. I hardly believe there could be more than two to three containers that have come into the whole country from any country abroad, from France, Germany, England, Holland or anywhere else. Anybody that has scrap in Europe and elsewhere keeps it for themselves and ships it to China. The same thing happens with Italians who have scrap. They would rather sell it themselves or resell it to scrap dealers that pay cash and then export to China. We’ve done a few exports this month and last month – some cable and some honey (a grade of yellow brass scrap).

Copper to the Far East is not moving, at least for the time being. They are not on the same price levels as local consumers. They must be paying slightly higher prices, but the difference is so small that it is not convenient to ship abroad. So, consequently people like the big European KME Group are enjoying life because they are buying scrap domestically and in other countries where they own property—France, Germany and Italy.

Aluminium is becoming a bit weak in availability. There is very little aluminium scrap available, and consequently we have higher prices. I think the price of secondary is much higher than the price of primary. If it hasn’t overtaken it, it is very close. It is pretty competitive.

In Italy all the scrap dealers are already closed. Some closed in late July and others in the first week of August. Today, there are only one or two left open. I have a feeling that September might pick up. But the problem is that industry is still not at 100 percent production levels, so consequently I would say today scrap ranges at about 60 percent availability.

One major producer is slowing down on brass but is going stronger on producing bronze ingots. Some copper refineries are doing well; I know the Austrians are buying a great deal of scrap in Italy, so are the KME Group, Iranian buyers and some German buyers as well. They are all looking around buying all they can around. They were taking advantage when copper could be purchased at high discounts and scrap dealers didn’t like it, but now they have to reduce their discounts in order to force scrap dealers to sell material to them as well. Cathode production is still going strong as well.

I have a feeling in 10 or 15 years’ time Europe will probably be very short of scrap. And there is going to be a change in a tendency. The way we see it today is that there is scrap available, but there is not as much as there was three to five years ago. It is getting less and less. Unless there is a big boom that lasts for a couple of years, I cannot see the same volume of scrap that was circulating 5 or 10 years ago in the next 5 or 10 years coming back.

In my opinion, we might end up with a lot of rod manufacturers producing rod with primary or secondary zinc and with primary copper. There does not seem to be a shortage in all copper scrap, especially the middle berries, the berries, the candies and copper tube (grades of copper). Birch/cliff (grade of copper), though, is getting shorter and less available.

Fernando Duranti can be contacted at fernandoduranti@leghemetalli.it.