The latest report from the Brussels-based Bureau of International Recycling (BIR) suggests that the metal markets may continue to face challenging conditions for some time. The use of terms like "dismal," "weak," and "doldrums" in the report indicates that recyclers are hoping for better market conditions soon.
Reports from BIR's Ferrous Division board members this month primarily depict weak demand and low pricing in the ferrous market. Non-Ferrous Division board members' reports express concerns about price volatility in the non-ferrous metals sector.
Harry Seale, a Ferrous Division board member from the UK-based Atlas Commodities, describes the domestic market as one where "domestic demand for recycled steel remains dismal, making exports a necessity." He adds, "Demand for containerized shipments to the Indian subcontinent and the Far East has still not returned to pre-Red Sea crisis levels, stifled by elevated shipping costs."
Seale points to short-term optimism for the Indian market but notes that for large-volume buyer Turkey, "A significant proportion, perhaps surpassing two-thirds, of Turkey’s electric arc furnace capacity lies dormant or is operational only intermittently, likely in response to prevailing conditions."
In the United States, George Adams, a Ferrous Division board member from California-based SA Recycling, reports that in the first quarter of this year, "recycled steel prices lost ground as mills chased the price of new steel lower." He adds, "The rally that was supposed to take prices higher never materialized as consumer demand continued to soften both in the U.S. and abroad."
Adams warns that traditionally, ongoing low prices in the ferrous market lead to supply shortages. He says, "The question now appears to be whether there will be enough recycled steel available to meet that slight increase in demand. If not, we will probably see another recycled steel price increase to generate the needed melt feedstock. To date, there appears to be little recycled steel in reserve as dealers are also going hand to mouth on a monthly basis."
Non-Ferrous Division report contributors take a somewhat different tone, particularly concerning the high-priced red metals market. Shen Dong from the U.S.-based OmniSource Corp., working in China, writes, "Data indicates that China’s copper scrap imports totaled 557,162 metric tons in the first quarter of 2024, a year-on-year increase of 15.8 percent."
Anirudha Agrawal from India-based Manaksia Aluminium Co. Ltd. notes that India maintains its position as the world’s fastest-growing major economy. However, Agrawal also points out that "problems in the Red Sea have had a huge impact on aluminum scrap import prices into India. Compared to alloy ingot and primary metal values, the aluminum scrap price still seems high and a correction is anticipated for the coming quarter."
Rick Dobkin from St. Louis-based Shapiro Metals writes, "There has been a substantial tightening of available recycled content metal in the U.S. As the terminal markets have risen, it is unusual to find that metal has been less available," he adds.
In the aluminum sector, Dobkin mentions that two larger aluminum mills are within a year of opening. Regarding any scrap shortage, he adds, "This supply gap is likely to be made up with sortation technology improvements allowing for mill usage of shred that is going into secondary end markets."
The BIR issued its report a few weeks before its members gather for the 2024 BIR World Recycling Convention & Exhibition in Copenhagen.
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