Delicate condition - Nonferrous - insecure U.S. economy seen as threat to scrap metal industry - Brief Article - Industry Overview

Recycling Today, Dec, 2002

A "fragile and depressed" U.S. economy could lead to a pile-up of nonferrous inventories and reduced metals demand, according to one speaker at the late October Bureau of International Recycling (BIR) Round-Table in Brussels.

In his summary of the world market situation, BIR Nonferrous Division vice president Salam Sharif of Sharif Metals Ltd. in the United Arab Emirates referred to the sluggish U.S. economy and added that unimpressive growth rates in Europe have resulted in "hand-to-mouth" consumption despite a shortage of scrap there.

Also noteworthy, according to Sharif, were interruptions to India's scrap imports owing to customs declaration and tariff problems. Sharif sees China as the "main hope" for a base metals market revival.

Speaking from the U.S. perspective, BIR Nonferrous Division senior vice president Robert Stein of Louis Padnos Iron & Metal Co., Holland, Mich., noted that China remains a destination for much U.S. scrap.

China's appetite for scrap is "insatiable." he noted, although its preference for buying on price rather than on value had resulted in some smaller U.S. scrap dealers "no longer sorting No 1 and No 2 copper."

Buying

Average U.S. Refiners Buying Prices for No.2 Copper Scrap

(cents per pounds)

October 2001    52.29
November        53.68
December        54.50
January 2002    55.40
February        57.34
March           59.64
April           58.80
May             60.39
June            63.95
July            60.59
August          55.48
September       55.68
October         56.70

Note: Table made from bar graph.

Source: American Metal Market