The following is a report from the recently concluded BIR Conference in Madrid, Spain.
There was very little to cheer delegates in the market overview given during the nonferrous Division of BIR during its Spring Convention. Vice President Ashwini Singhal of Singhal Commodities Ltd, India, provided a digest of regional reports in which the aluminum sector in the United States offered a rare bright spot.
Even then, it was a matter of a decline having apparently come to an end with a steadier rate of purchasing at lower than normal levels. Supplies of top grades of scrap were in balance.
However, after good business in the first quarter U.S. secondary aluminum smelters were watching order-intake decline, and had subsequently reduced their scrap buying prices in line with prices of ingot. The construction industry was proving to be the exception to a general industrial slowdown bringing reduced demand for metals. In common with several other areas of the world, scrap availability was largely price-sensitive in the United States, leading to breakdowns in the supply chain.
The slowing of the U.S. economy and increased production by Chinese mills had contributed to sluggish markets in Asia and the Pacific Rim, Singhal added. China continued to be a buyer of copper scrap with imports in the first quarter up by 17%, but imports of aluminum scrap fell by 16%. In the United Kingdom, manufacturing industry continued to shrink, with less scrap consumed and less generated. Currency movements had at least helped to enhance overseas sales, underlining the role of the UK as a net exporter of non-ferrous scrap.
The Italian market was characterized as dull, with the nonferrous industry in slowdown mode.
As elsewhere in Europe, lack of supplies from Russia and the Ukraine were hampering activity in Germany where low LME prices were causing traditional sources to withhold material while many small collectors had simply lost interest. Consequently, there was much pressure on supply and margins were extremely tight. Even the usually vibrant market in the Middle East had experienced a dull quarter, said Singhal, and no improvement was insight.
Smelters in The Netherlands were reducing output for want of scrap and in the Nordic countries there was concern that new regulations this year might affect availability and movement of non-ferrous scrap.
Singhal reported that the non-ferrous sector in India was beginning to feel the effects of recessionary trends. Increased federal spending on infrastructure development and reforms in the core industries could be seen as something of a silver lining.
Copper and copper alloy scrap was expected to remain in short supply while demand increased. Demand for aluminum scrap would also rise as spending on infrastructure grew and the motor industry was rationalized.
Reviewing the work of Eurometrec, the body that represents non-ferrous recycling in the European Union, its new president Fernando Duranti of Leghe & Metalli International srl, Italy, dealt with several issues of direct relevance to cross-border trade. Consignments of mixed 'green list’ materials, for example, were still subject to being stopped in transit by the authorities. He emphasized that Eurometrec still needed to hear from companies about any transport difficulties arising from waste shipment legislation.
Division President Larry Sax of Jack Engle & Co, USA, contributed his customary economic commentary, which this time concerned a United States Federal Reserve survey showing that many banks were continuing to tighten lending for commercial and industrial customers. None were relaxing their credit policies. Even so, financing was still available in other sections of the money market and in fact demand for loans was declining, reflecting lower investment and more modest expansion plans.
Lead in the Limelight
From guest speaker Francisco Román of the Spanish association Uniplom, came an analysis of the outlook for lead. The classic uses, he said, had been largely eclipsed, so that 70% now went into batteries. Leaded petrol was an example of the spectacular reduction in other applications. An exception was the extent to which lead was still employed in the UK for architectural purposes.
Román viewed the future for lead essentially as a single-purpose material, linked very closely with lead-acid batteries. "If someone invents a replacement for these," he commented, "lead will be dead." Despite reports of potential alternatives, he foresaw no immediate risk, for many improvements had been made in battery design.
Recycling was essential if world demand for lead was to be met - and the recyclability of lead-acid batteries particularly important. An unremitting campaign had been waged against the metal, and as result it suffered an image problem. Legislative pressures were considerable and drove up costs. Yet he argued that lead as well as cadmium and mercury were not as dangerous as suggested.
José Miguel Benavente of ARPAL, the Spanish Aluminum Recycling Association, examined the metal from various technical standpoints, including the need to process scrap to the highest standards and ensure its most efficient reuse. He also adopted a more philosophical approach to his subject, concentrating especially on the need to make society aware of the enormous importance of scrap. There was great ignorance whether in economic, environmental or resource terms, and this became reflected in the way in which society regarded recycling and tried to regulate it.