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Fears expressed for short-term health of ferrous recycling market

Date: Fri, 16 Nov 2012 | Author: Paul Sanderson

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Challenges will remain in the ferrous recycling market into next year, according to the latest BIR World Mirror for ferrous metal.

Writing in the opening remarks to the World Mirror, BIR Ferrous Division President and senior consultant at German firm TSR Recycling warned that conditions are likely to remain tough.

He added: “Moody’s Investor Service has cut the rating for the world’s largest steel producer Arcelor-Mittal to Baa3, which is the grade for junk bonds. Many steel producers are struggling hugely with their debt burdens, their losses and their empty order books. For Europe at least, this negative economic environment will continue to prevail until late 2013 or even longer.

“Our steel recycling industry is facing the same problems: weak scrap consumption; weak capacity utilisation; write-offs for expansion investments during the boom period of 2003-2008; debt burdens; and credit risk insurance problems for many of our customers.

“There are just some of the challenges with which we have to cope.

“Scrap exports will be, for many of us, a kind of life insurance. Luckily, countries like Turkey and others are continuously importing scrap, and also business sentiment in China is improving.”

In the same document, BIR Ferrous Division statistics advisor Rolf Willeke noted that North American and Asia steel production was up 7.2 per cent and 1.6 per cent respectively, while EU-27 and South America recorded negative growth of 4.5 per cent and 3.5 per cent.

The first six months of the year also saw a decline in steel scrap usage in China of 17.1 per cent to 41.3 million tonnes. However, Turkey, which is the world’s leading importer of steel, increased its purchases in the same period by 13.4 per cent to 11.343 million tonnes.

Category: Recycling
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