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Scrap collection system still in need of repair

July 2016 by Ian Marti


‘This is not your dad’s scrap business any more,’ delegates to the BIR ferrous division meeting in Berlin were assured by its president William Schmiedel. Unlike for previous generations, the markets are at the mercy of a vast range of global influences – including speculation on the Chinese futures markets by participants with no stake in physical metal.

The recent sharp spike in ferrous scrap prices confirmed substantial ‘pent-up demand’ for the industry’s material but ‘did not last long enough to adequately repair the collection system’, the latest meeting of the BIR ferrous division was told by its president William Schmiedel of Sims Metal Management in the USA. As a result, supply – or lack of it – remains a major factor in the marketplace.

For shipments of HMS scrap into Turkey, prices surged from an early-year low of around US$ 175 per tonne to nearer US$ 330 in April, according to Schmiedel. But at the time of his presentation in Berlin, it could not be said with any confidence where the next mark would be made on the price graph given the complete withdrawal of Turkish buyers from the international marketplace in recent weeks.

If ferrous scrap prices have been on what Schmiedel described as a ‘roller-coaster’, the ups and downs in Chinese billet values have been no less violent, soaring to a 28-month high before slumping 30% to below US$ 300 per tonne. He also emphasised how the huge number of contracts being traded on China’s futures exchanges has been adding to the uncertainty apparent in the physical market.

Taken by surprise

According to ferrous division board member Tom Bird of UK-based Mettalis Recycling, customers had been showing signs of returning to ferrous scrap from ‘unreliable billet supplies’ although the HMS surge to beyond US$ 300 per tonne ‘took us all by surprise’. However, some major buyers – including Tokyo Steel in Japan – implemented significant ferrous scrap price…

This article has been published in magazine Recycling International issue July 2016

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