More of the Same
The record attendance at the Institute of Scrap Recycling Industries Inc. (ISRI) 2008 Annual Convention could have been attributed to its Las Vegas location. But, a key reason for the large turnout was likely the strong markets for ferrous and nonferrous metals.
In a number of sessions that looked at markets for various nonferrous metals, most panelists said price and demand would remain healthy through the remainder of the year.
An international panel of industry experts forecasted that prices for copper would remain fairly strong this year, noting that hedge funds continued to play a key role in the market.
While copper may dip a bit throughout the year, the bias would be toward the upside, according to speakers, with a strong floor established at a price far greater than it was several years ago.
John Chen, executive vice president of Tung Tai Group, San Jose, Calif.; Marc Natan, Manco, France; and Salam Sharif, Sharif Metals, United Arab Emirates, all looked at the strong demand for copper and posited that there were no significant reasons for a sharp decline, despite a slower U.S. economy.
Patricia Mohr, vice president of Scotiabank, a commercial bank based in Canada, described the economic fundamentals that were driving the metal. With limited new supply coming online in the near term, there could be some copper shortages, she noted.
Aluminum also should see more strength throughout 2008, as two consumers and a commodity researcher pointed to a number of positives that they said should boost aluminum activity in North America.
Edgardo Gelsomino, aluminum research manager for Metal Bulletin Research, London, noted that some traditional financial markets began liquidating their aluminum positions to cover losses in other investment areas. However, a tightening aluminum market, along with increasing energy costs, have put upward pressure on aluminum.
Denny Luma, president and COO, Superior Aluminum Alloys, New Haven, Ind., and Norberto Vidana, procurement and quality assurance manager, Nemak, Mexico, each noted continued challenges in obtaining sufficient amounts of scrap to meet their needs.
While acknowledging the negative effect the domestic auto industry was having on their businesses, Vidana and Luma said there was enough demand to keep the flow of aluminum steady.
One side effect of the slowing auto industry has been the decline in industrial scrap generation, which will likely reduce the availability of aluminum scrap.
For the nickel/stainless market, the significant correction that occurred during the second half of last year was not surprising. Vanessa Davidson, managing consultant for CRU Nickel & Chrome Group, noted that significant cutbacks in stainless steel production eliminated excess supply. According to Davidson, the cutbacks resulted in a 7.2 percent decline in production.
Stainless steel production in China grew by 42 percent last year, while it declined in the rest of the world by 8.2 percent.
LME (London Metals Exchange) stainless steel stocks increased to 47,900 metric tons by the end of last year; in early April of 2008, stocks increased to 50,000 metric tons.
Meanwhile, the scrap overhang, seen the middle of last year, increased sharply. Since then, inventories have been drawn down, and scrap discounts have narrowed.
Davidson noted that the outlook for stainless steel production would be predicated on the overall economic outlook, which she said was deteriorating.
(Additional news about nonferrous scrap, including breaking news and consuming industry reports, is available online at www.RecyclingToday.com.)