A more stable month compared to the previous couple, July saw the majority of merchants that MRW spoke to experiencing little or no price movements.
Yards continue to be quiet for the most part, albeit with pockets of activity in some regions, with many operators finding trucks standing idle, as both gate trade and collection work was slow.
One merchant in the South said: “There’s enough coming in to keep us going, but it’s quiet and it’s bits and pieces and there’s no sign of it improving.”
Merchants across the UK echo this sentiment and seem by now resigned to slow business and the expectation that whatever economic recovery may or may not officially be happening, it is unlikely to transfer into any real uplift on the ground in the near to medium term.
One North East operator said he had never known it so quiet: “We’ve never had wagons just standing,” he said. “There’s no demolition. Casual stuff is down about 20 to 30%. You can’t blame all that on the cash ban. No one’s talking up next month [August], some are talking it down.”
The result for many is a new business plan that simply involves the determination to keep business ticking over until better economic times emerge.
One operator in the North West said there was not enough business to go around. “The problem is there are a lot more scrap dealers and recyclers that came out of the woodwork when the prices were higher so now there are more people fighting for less. Something’s got to give,” he said.
In more general industry news, the weak metals market has prompted Sita to review the future of its metals recycling operation at its seven sites in England, citing years of market decline, and national and global falls in both demand and the pricing of metals within commodities markets.
And at the smaller end of the scale, one operator reported an increasing number of waste company equipment turning up at auctions as the firms had gone to the wall. Another smaller merchant told MRW he was considering packing up.
“The plumbers and builders have all but disappeared and now I have to fill out more paper work for the council and the Environment Agency than I do to get a mortage, and pay out more and more for permits,” he said.
The slow demand from abroad, which has characterized several exporters’ experiences in recent weeks, continues.
One exporter in Scotland said: “There’s a lack of sales for exports so they are not very confident in their buying.”
The hot weather is having a mixed impact on merchants. Some report that excessive heat is keeping people away or prompting impromptu holidays. Others report that it is boosting casual trade from those embarking on a summer clearout of premises and homes.
A couple of merchants have experienced a little boost in prices, but they were muted about its benefit. One operator in Wales said:
“Prices went up a bit at the beginning of the month, especially for OA, but there’s not a lot available for collection. Even if it went up £20 it still wouldn’t bring in much material.”
Another North West operator speculated similarly: “Prices might got up next month, but if they do, unless you’re sitting on loads of stock and can sell it, it doesn’t make any difference.”
However, while an air of uncertainty pervades about prices over the next few weeks, there are rumours that prices could be set to drop again at the beginning of the August by as much as £20 per tonne.
Meanwhile, several merchants are hopeful but skeptical as to whether the cash ban and the new Scrap Metal Dealers Act would have any lasting impact without more enforcement, as cash dealing was still occurring.
“I think it’s going to be quiet for the next couple of months and pick up in February and March, after the new law settles [Scrap Metal Dealers Act] in,’ said one Midlands merchant. “That should give a boost to legitimate traders, but it depends whether or not they enforce it. They didn’t enforce the old act so if they don’t with the new act it won’t make any difference.
Another merchant in the North East noted that as there was no cash ban in Scotland it was more attractive to sell material there for some suppliers.
World crude steel production for the 64 countries reporting to the World Steel Association was 132 million tonnes in June 2013, an increase of 1.9% compared to June 2012.
World crude steel production in the first six months of 2013 was 789.8 million tonnes, an increase of 2.0% compared to the same period of 2012. Asia showed an increase of 5.5% while other regions recorded negative growth in the first half of 2013. The EU 27 was on down 5.1% and North and South America down 5.8% and 4.6% respectively.
China’s crude steel production for June 2013 was 64.7 million tonnes, up 4.6% compared to June 2012. Elsewhere in Asia, Japan produced 9.3 million tonnes in June 2013, an increase of 0.9% compared to the same month last year. South Korea’s crude steel production was 5.5 million tonnes in June 2013, down 5.4% on June 2012.
In the EU, Germany produced 3.7 million tonnes of crude steel in June 2013, down 2.2% compared to June 2012. Italy’s production was 2.2 million tonnes, down 10.3% on June 2012. France produced 1.4 million tonnes in June 2013, up by 2.8% on a year earlier.
Turkey’s crude steel production for June 2013 was 3.0 million tonnes, a slight increase of 0.5% compared to June 2012.
In June 2013, Russia produced 5.7 million tonnes of crude steel, a fall of 0.8% compared to the same month last year. Ukraine’s crude steel production for June 2013 was 3.1 million tonnes, 7.8% higher than June 2012.
The US produced 7.2 million tonnes of crude steel in June 2013, down 0.2% on June 2012. Brazil produced 2.8 million tonnes, an increase of 2.7% compared to June 2012.
The crude steel capacity utilisation ratio for the 64 countries in June 2013 declined slightly to 79.2% from 79.6% in May 2013. Compared to June 2012, it is 1.5 percentage points lower.