US Non-ferrous Bright Spot at BIR Convention

Madrid, Spain - There was very little to cheer delegates in the market overview given on May 23 to the Non-Ferrous Division of BIR during the Spring Convention of the world recycling federation in Madrid. Vice President Ashwini Singhal of Singhal Commodities Ltd, India, provided a digest of regional reports in which the aluminium 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 US secondary aluminium 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 US economy and increased production by Chinese mills had contributed to sluggish markets in Asia and the Pacific Rim, Mr. Singhal went on. China continued to be a buyer of copper scrap with imports in the first quarter up by 17 percent, but imports of aluminium scrap fell by 16 percent. In the United Kingdom, the manufacturing industry continued to shrink, with less scrap consumed and less generated.

The Italian market was characterized as dull, with the non-ferrous 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 Mr. Singhal.

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.

Turning to his home territory, Mr. 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 aluminium 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. 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.

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 percent now went into batteries.

Mr. 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.