Nonferrous Department

News, statistics and orders placed from East Asia continue to point to strong demand for nonferrous metals. A reviving North American manufacturing sector may also be in the cards, as positive jobs data and strong corporate earnings reports have seemed to keep consumers and small business owners upbeat despite the political turmoil in Iraq.

Much as with steel and ferrous scrap pricing, however, the surge of the past nine months may have peaked in late spring, as mining and smelting companies have ramped up production to meet increased global demand for copper and aluminum. Much like a hot stock on Wall Street, speculators may have already factored in the anticipated revival of North American manufacturing into the pricing.

Chinese scrap buyers’ reluctance to keep paying the high prices of the past couple of months also has affected the copper scrap market.

According to a Reuters report, increased scrutiny of China’s banking system may also be having an effect, as the money supply has tightened up for small and medium-sized companies in China.

China’s new permitting process for importers and processors of scrap metal may have also caused some of the hiccups. Facing a looming July 1 deadline, some 400 companies have already secured their permits, according to Reuters, while others try to finalize permission.

Many buyers and sellers say that once the banking and customs changes are understood and in place, copper scrap may resume flowing from North America to China. Indeed, some smelter operators may need to play "catch up," spurring a lot of buying.

"People around here are still bullish," says one nonferrous broker who prepares shipments to China. "If there is a demand, the buyers are going to be back in the market."

While copper buying patterns in China have gained most of the attention, aluminum shipments to China are also increasing. "Aluminum pricing and shipments have not been as volatile as copper, but the trends are up," says the broker.

Don Ingram, CEO of Imco Recycling Inc., Irving, Texas, has left the aluminum and zinc scrap-consuming company.

In a mid-April, Imco announced that Richard Kerr, executive vice president and president of Imco’s Aluminum Operations, has been appointed by the board of directors to serve as interim president and CEO. Additionally, John Balkcom, a board member, was named chairman.

"I am committed to continuing to provide our customers with superior customer service and products of the highest quality," Kerr said.

In March, Imco announced that it had revised its net earnings upward for the fourth quarter and all of 2003, adding the proceeds of an inter-company loan involving a German subsidiary.

Also, Imco has announced plans to expand production at its Saginaw, Mich., aluminum alloys plant and to build a new magnesium recycling plant in Germany.

After a six-year hiatus, a large copper smelter in Ahmedabad, India, has reportedly re-opened.

Reuters reports that the SWIL Ltd. smelter has re-sumed production of LME Grade 'A' copper cathodes.

According to the Rueter’s report, the SWIL facility could be India’s third-largest copper producer once it reaches its full output capacity of 70,000 metric tons per year.

The plant will reportedly ease its way toward that production level, however, starting by producing less than 1,000 tons per month. The plant will gradually increase its production in the hopes of reaching full production in 2006.

The plant is melting copper scrap as its feedstock, as supplies of imported copper concentrates are said to be even tighter than those for copper scrap.

According to the Reuters report, SWIL plans to continue sourcing copper scrap domestically, though the plant may possibly need to import scrap. The company will also continue to monitor the concentrates market, looking for opportunities to purchase that material as well.