As the Bureau of International Recycling (BIR) gears up for its World Recycling Convention and Exhibition towards the end of this month, the release of the BIR Annual Report 2004 means that it is also a time to look back at the driving forces and market trends for ferrous and non-ferrous metals.
Unsurprisingly, the report's references to China were prolific as the country's "economic dynamism" proved to be a main catalyst for world demand. However, according to Francis Veys, BIR director general, China's growth was joined last year by the recovery of the US, European and Japanese economies with the weakness of the dollar in relation to the euro and yen stimulating demand even further.
Robert W Philip, president of the ferrous division, says: "As some have said, it was probably akin to the 'perfect storm,' as world steel demand increased significantly, world steel production rose sharply and scrap and finished steel prices improved to levels not seen in many years. All this occurred in parallel with mill consolidation and capacity expansion in the US and globally."
Philip cites China as one of the major global and domestic factors influencing 2004's economy as it continues to seek steady supplies of energy and raw materials. He says that a key component in China's drive was the growth in manufacturing and exports, with a growth rate in the fourth quarter of 9.5%.
"As has been noted by a variety of global market observers, there has been a tremendous surge in raw materials flowing to China since mid-2002," continues Philip, "including scrap metal, iron ore, coal, coke and a host of other dry bulk products."
According to the report, Chinese steel mill production rose from 129 million tonnes in 2000 to 217 million tonnes in 2003 and is believed to have approached 294 million tonnes last year.
From a more global viewpoint, the scrap metal markets fluctuated significantly in 2004. With averages of just under $180 a tonne at the beginning of the year and a high of nearly $240 a tonne, the year closed with an average of $200 a tonne.
Although 2004 turned out to be one of the better years for the recycling sector, Marc Natan, president of the non-ferrous metals division, points out that price volatility was increased by funds' and other speculations and terrorist attacks such as the one in Spain last March.
Despite this, Natan says that 2004 was dominated by a number of positive factors, including: stocks reaching historic lows in the warehouses of the LME, Comex
and the Shanghai Stock Exchange; increased international economic growth, the weakness of the dollar in relation to the euro and confirmation that China and, to some extent India, are increasingly committed to recycling.
Addressing the concerns surrounding export to China and its licensing system, AQSIQ, Natan says that he cannot ignore the worries of the smelters, remelters and foundries that have been annoyed by the increasing volumes of raw material going to Asia.
"We must remember that these consumers - including many BIR members - are our partners," he says. "We understand their anxieties surrounding h