Metal recyclers expect further ferrous price falls

Posted by anzhuo on December 21st, 2015

    The decline in ferrous scrap metal prices worldwide is unlikely to end until the start of 2010 at the earliest as levels of new steel production remain low, metals recyclers have warned. But, speakers at last week's Bureau of International Recycling annual convention, in Amsterdam, were more positive about the situation for non-ferrous scrap metal recyclers, claiming state stimulus packages would boost demand for material from the construction and automotive sector.Speaking at the event's Ferrous Round Table session, Blake Kelley, of Sims Metal Management, said that low levels of steel production were making it very hard for scrap metal recyclers to balance their financial situation."Lower volume makes it very difficult for scrap processors and steel producers to effectively amoritise their costs," he explained, adding that, with there being so much unused excess capacity in the steel industry, steel prices were unlikely to increase to sustainable levels "anytime soon".

    And, he claimed that prices were set to continue falling until supply and demand balanced out, which could happen by the end of the year but was more likely in January 2010.RecoveryHis sentiments were echoed by Dr Thomas Ludwig, chief executive of German steel distributor Klockner and Co SE, who claimed that real demand for steel had shown no signs of a major recovery and could remain at low levels for some time.As a result, he claimed that steel prices would remain highly volatile in the next few years.Since plummeting last summer from historic high levels, the prices paid for UK ferrous scrap have continued to fluctuate, increasing during the summer of 2009, but slipping last month due to a lack of international demand.And, in a report on the European Union situation given at the BIR event, Markus Berg of German company TSR Recycling revealed that EU steel scrap consumption had fallen by 40% in January to August 2009, to 45 million tonnes, while exports fell by 20%, to 6.5 million tonnes - with "leading buyer" Turkey cutting its orders for EU material by 30% to just below three million tonnes.He added: "One year of crisis with production cuts of more than 40% has certainly left its mark on the financial situation of our customers; their margins seem to be healthy, but the volumes are missing.

    "Non-ferrousMeanwhile, at the convention's Non-ferrous Metals Round Table session, the division's president, Robert Stein, of US firm Alter Trading, claimed that, while some companies had vanished and others had lost a lot of money, the industry was "on a far better course than we were last autumn".While acknowledging there was more caution in the marketplace, he claimed government stimulus packages and demand from developing nations would boost the non-ferrous scrap market. He said: "As restocking of finished non-ferrous products take place, as the automotive industries around the world improve, as delayed construction projects are rejuvenated and people go back to their jobs, I think we can look forward to more sustainable improvement in our businesses.

    "On Friday, the UK's largest aluminium can recycler Novelis revealed that an increase in the market price for aluminium had prompted it to raise the price it pays for cans by ?75 per tonne, with effect from today (see story).However, at the BIR event, Gunter Kirchner, secretary general of the Organisation of European Aluminium Refiners and Remelters (OEA), expressed caution, noting that he was "not so sure the bad times are really over".At the same time, he did, however, also express certainty that aluminium scrap recovery volumes would increase in the long term.

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