Posted on 30/10/2009 in category Ferrous

 

PRESSRELEASE

FOR IMMEDIATE RELEASE

Brussels,30th October 2009

BIRAutumn Round-Table Sessions

Amsterdam,26-27 October 2009



FerrousDivision:

Scrapprices likely to remain volatile

The strength and sustainability of themuch-discussed economic upturn preoccupied speakers at the BIRFerrous Round-Table in Amsterdam.

Divisional President Christian Rubachof Germany-based Interseroh Hansa Recycling GmbH said of therecovery: “So far, this seems to be based on restocking ofinventories and/or the result of stimulus packages and othergovernmental programmes.” And over the coming years, he added, theWestern economies appear likely to suffer significantly slower growthrates than leading developing nations.

Idled excess capacity remains an“overriding issue” in the steel industry and so, despiteconsolidation, the sector’s product prices “are unlikely toincrease to sustainable levels any time soon”, argued Blake Kelleyof Sims Metal Management in his US and international market report.“But in the meantime, lower volume makes it very difficult forscrap processors and steel producers to effectively amortise theircosts.”

He added that scrap prices are likelyto continue easing downwards until demand and supply return tobalance - possibly by late December buying but more probably notuntil January.

The EU report from Markus Barg of TSRRecycling in Germany confirmed that “one year of crisis withproduction cuts of more than 40% has certainly left its mark on thefinancial situation of our customers; their margins seem to behealthy, but the volumes are missing”. EU steel scrap consumptionfell around 40% in the January-August period to approximately 45mtonnes while exports dropped some 20% in the first half of 2009 to6.5m tonnes, with leading buyer Turkey slashing its orders for EUmaterial by 39% to just short of 3m tonnes.

According to Andrey Moiseenko of MAIRin Russia, domestic scrap collection volumes amounted to some 2mtonnes in September this year - a decline of around 30% compared to2008. However, October is likely to see the highest collection totalof the year to date, he added.

The Ferrous Division’s guest speakerDr Thomas Ludwig, CEO of German steel distributor Klöckner &CoSE, also warned that real demand for steel has shown no signs of amajor recovery and could remain at low levels for some time. Withouta rapid improvement in real demand, steel prices are likely to remainhighly volatile in the coming years, he said.

Highlighting China as “the wildcard”in his industry outlook, he argued that fears of the country becominga major steel exporter are unfounded. He also suggested that theworst of the global crisis “is behind us” and that the longdestocking phase in the steel sector is at an end.

Ikbal Nathani of India’s NathaniGroup of Companies emphasised the concerted efforts of BIR, the USInstitute of Scrap Recycling Industries and the newly-formed MetalRecycling Association of India to convince the Indian government thatferrous and non-ferrous scrap should not be classified as “hazardouswaste”. Current proposals threaten scrap exports to the country, hewarned.

Also at the meeting, Ferrous DivisionHonorary President Anthony Bird of The Bird Group of Companies in theUK made a special presentation to Alberto Canevali to mark thelatter’s retirement from the European Commission. Formerly incharge of steel and scrap industry affairs within the Commission’sDG Enterprise, Mr Canevali has been “an important and great friendof our industry for many years”, delegates were told.

ends