South American Agency Seeks Control on Scrap Metal

Paraguay's center for metallurgy industries (Cime) is asking authorities to implement a levy on scrap material exports such as stainless steel, copper and bronze.

"The idea is to restrict exports considering the country does not produce any of those metals, especially stainless steel used in alloys," Cime president Felipe Aghemo told BNamericas.

The iron issue is not as problematic because domestic production makes up for exports. "But other metals are not protected in that way, which is impacting the processing industry," the official added.

Paraguay has one export control, applied through a permit for exports. "But physically it is very difficult to prevent supplies from leaving the country, which generates shortages."

While an agreement exists with scrap exporters who agreed to guarantee 1Mt per month of material supply for local industry, prices have increased substantially, impacting supply costs and the final product price.

"Our products are not competitive given that scrap exported to Brazil, Japan or Thailand returns to Paraguay as a cheaper manufactured product," Aghemo said.

Industry is working at minimum capacity due to market conditions but once the market picks up, industry will suffer from the lack of raw material, the official added. BN Americas