Posted on 02/06/2009 in category Convention

 

PRESS RELEASE

FOR IMMEDIATE RELEASE

Tuesday,2 June 2009

BIR WorldRecycling Convention

25-27 May2009, Dubai

PressReleases on Commodity Sessions

Non-FerrousMetals Division:

Seriousdamage to market infrastructure

Since BIR’s 2008 AutumnConvention inDüsseldorf, the non-ferrous scrap sector has been “marred by themost serious damage to its infrastructure ever” as a result of the“unacceptable behaviour” and “wholly unethical activities” ofsome commercial operators in Asia and elsewhere, according to BIRNon-Ferrous Metals Division President Robert Stein of US-based AlterTrading.

This “assault” in the formofcontract defaults “can’t be overlooked”, Mr Stein insisted todelegates at the latest divisional meeting. And he confirmed that, inDubai, the Division’s board had approved two resolutions relatingto compliance with and enforcement of BIR’s Code of Conduct. Thesereflected “the need to act” and “the need for change”, hestated.

The decisions taken by someChinesebuyers to renege on signed contracts during late 2008 had “cast adark shadow” over the reputation of the country’s purchasers, itwas later noted by guest speaker Lili Shi, a freelance journalist andconsultant based in China. However, she stressed that many otherChinese buyers had fulfilled their contractual obligations.

Subsequent to these events,the speakernoted, overseas suppliers of non-ferrous scrap to China have beendemanding up to 100% payment before loading - a requirement which hasdented buyers’ cash-flows and prompted them to reduce theirpurchased volumes. “There is no doubt that the times of sudden hugeprofits by Chinese scrap buyers have already passed,” she said.

As regards the marketsthemselves, MrStein noted that conditions have been “somewhat better” in morerecent months but “nowhere near acceptable”. A survey of globaldevelopments, provided by Peter Dahmen of MetallhandelsgesellschaftSchoof & Haslacher in Germany, concluded that China is“recovering faster than all other countries” from the globalcrisis although its purchased volumes of scrap are regarded as “inexcess of actual consumption” - a phenomenon the speaker attributedin part to the country’s economic stimulus package. “Continuously”growing volumes of non-ferrous scrap have also been exported to Indiaand other Asian countries, he added.

Since the onset of theeconomic crisis,scrap volumes have suffered dramatic declines in a number of keycountries and regions of the world, including the USA, Australasia,South Africa and many parts of Europe, noted Mr Dahmen. However, headded, high Chinese prices have improved copper scrap availability inthe Middle East.

The scope for rapid metalsconsumptiongrowth in India was emphasised by guest speaker Ujjwal Munjal. By wayof example, the CEO of Rockman Industries pointed out that per capitaconsumption of copper is 3kg per annum in India compared to adeveloped world average of 8kg, while the country’s aluminiumconsumption is a mere 0.85kg per head compared to a developed worldmean of 16-35kg per year.

According to Mr Munjal,India has beenrelatively well insulated against the global crisis owing to the factthat exports account for only 17% of its GDP. At the same time, thecountry is benefiting from solid banks and stable government, heargued.

Dismissed as“old-fashioned” in thepast, Brazil’s highly-regulated economy is now considered “trendy”,joked fellow guest speaker Bianca Vicintin Abud of the country’sMetalur Group. As an example of how the South American country isenjoying more positive market conditions than many other parts of theworld, she noted that a reduction in domestic taxes on cars had ledto the automotive industry returning its best-ever first-quartersales results in 2009.

 

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