Market Reports: Nonferrous, the Middle East and Russia

Market Report: Nonferrous Scrap, Middle East

Commentary by Salam Sharif, Sharif Metals.

It is one of those hot temperature seasons here. Looking at market conditions, I can see copper prices are getting back to almost a six-month high. And aluminium is hovering around a $2,000 limit. Movement overall here is a little bit quiet because of the summertime. A lot of the factories go out on holiday and shut down for maintenance. People are not posting the high [production] numbers they might during other times of year.

If you can get your hands on a firm sale, you go ahead and confirm it so that you go ahead and make a sale while pricing is strong. I don’t see a lot of people planning long-term since they don’t know which direction prices are headed.

We are not getting paid on time for material. Because the numbers are high, buyers are not paying on time. I’m talking about Far Eastern buyers. There is always a delay. It’s kind of a difficult cash flow situation. The cost of raw material is expensive. You want to maintain your turnover so you will be within your budget. You see that your cash flow runs out of pocket because the buyers do not pay you on time, so that’s one of those issues where it is best to have a very tight string on one’s money.

High grade aluminium I can sell to Europe. I can still find homes in European refineries for some copper, but not the lower grades.

Berry is finding a better home in Europe than in Asia. Discounts are increasing in the Far East for berry (No. 1 copper). Nevertheless, No. 2 copper is still better off going to the Far East. There are tight finances there and the [burden] of documents is more than anticipated, but you have to go where the market is.

As far as aluminium is concerned, producer grades go to Europe. There is a shortage of scrap in Europe. Premiums have gone higher. Lower grades of aluminum like taint/tabor (grade of aluminum scrap) and [some grades used to make] secondary aluminium alloys still find homes in Asia, not in Europe.

The ferrous market is always in a difficult situation in the summer. The factories have not been buying in the last month. They have promised to start buying at end of August and beginning of September. The temperature is very high. It is impossible to run shredder motors when the temperature during the day gets up to 55 degrees Celsius (131 degrees Fahrenheit). The motor gets up to 130 degrees Celsius (260 degrees Fahrenheit).

I haven’t shipped much shredded steel to Turkey because most of what we do comes out of the Arabian Peninsula, which does not make it feasible to go through the canal. Out of the Mediterranean, I think there is still a better home for shredded material in Turkey because containerized service will not be convenient or feasible. Turkey is still buying from its domestic market and also out of the North African side; so it is a limited market. Containerized ferrous scrap till finds a home in India and nearby Asian markets, however it is quite insignificant.

Stainless steel is a pretty specialized item. It goes to Europe, Asia and some goes to the East Coast as well. It depends on which grades of steel can make an alloy. You are talking about a pretty specialized market.

It’s one of those summers that you want to slow down a little bit, do a lot of housekeeping, plan for the last quarter of this year and see how you can end up financially.

Salam Sharif can be contacted at salam@sharifmetals.com.

Market Report: Nonferrous Metals, Russia

Commentary of nonferrous markets in Russia provided by Ildar Neverov, Scrap Market Ltd.

Copper scrap is available and demand from consumers is very good. Prices are holding well. Consumers are paying their bills on time, which is a change from several months ago. Exports are still being sent in the form of ingots. To save the large [scrap] export duties, it is still economical to melt the scrap into ingot form and export the ingots.

Aluminium scrap is available, but not as freely as copper. The demand for aluminium is good. All the base metals are trading freely within Russia.

Stainless steel scrap is still in demand for export. Prices are very workable. Most material is going to Germany and Spain.

Ildar Neverov can be contacted at siberiametals@bk.ru.