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Security of material supply

Theft of complete containers or of a proportion of a container’s contents is “becoming contagious” and represents “a problem that is not going to go away”, the recent BIR Spring Convention in Rome (29 May to 1 June) was told by Robert Voss of Rickmansworth-based Voss International, the chairman of the world recycling organisation’s International Trade Council (ITC).

The implications of such thefts extend well beyond the loss of valuable commodities, Mr Voss underlined. Other negatives listed by him were insurance premiums “going through the roof”, unhappy customers left feeling “short-changed”, and shippers reluctant to handle the scrap industry’s materials.

He added that mainstream media coverage rarely reflects the fact that the scrap industry itself is “often the victim” when it comes to stolen metals, instead focusing on thefts from church roofs, war memorials and the railway system.

Mr Voss urged BIR members to report any instances of theft or fraud in order to help the world body in its fight against these major problems and to improve the industry’s image as a result.

At the ITC meeting, guest speakers scorned any suggestion that it is impossible to open a container without breaking the seal. According to Pottengal Mukundan, senior director of the International Maritime Bureau (a department of the International Chamber of Commerce specialising in fighting crime relating to maritime trade and transportation), there are “at least five ways to open a container without breaking the seal”.

The advice offered to delegates was to: pursue a policy of “robust due diligence”; to channel details of thefts and fraud to employees “on the front line”; and to remain abreast of latest technological developments regarding container security devices.

Theft is affecting more than just metals recyclers, it emerged in Rome. The BIR Textiles Division’s vice presidentMehdi Zerroug of France-based Framimex contended that theft of used clothing from collection containers or of the containers themselves “is increasing strongly”, adding that “legal measures to fight these actions have been insufficient to date”.

The same speaker also reported that, in France at least, yields from collection containers have been typically 15-20% lower on average in the first half of this year than in the same period of 2011. “This drop can be attributed to the combination of an unfavourable climate, the economic crisis, an increase in competition and finally an upturn in the number of collection containers,” he told delegates.

Besides theft, another dominant theme at the BIR Spring Convention was the threat of protectionist measures to the free and fair trade of recyclables. Barbara Fliess,  senior economist in the trade and agriculture directorate of the Organisation for Economic Co-operation and Development (OECD), told the ferrous division gathering that export restrictions “are being used more often around the world” - with measures relating to steel materials being “relatively frequent”.

Ms Fliess explained that her organisation is constructing an inventory of export restrictions such as bans, taxes and licensing requirements; it has already identified 30 countries which impose measures of this type on exports of iron and steel scrap. “If governments try to control exports of scrap, they tend to use heavy measures - mostly either to safeguard domestic supply or to control illegal exports,” she told delegates. “The ideal situation would be free trade in most circumstances.”

Research to date suggests that, in value terms, around 19% of the world’s iron and steel scrap exports are subject to a restriction of some sort; this compares to 14% for copper scrap and 4% for aluminium scrap. This work in progress at the OECD is an attempt to record not only the restrictions imposed but also the reasons behind their implementation. The aim is also to examine possible alternatives to the restrictions as well as their effects on trade.

The president of the European Ferrous Recovery and Recycling Federation (EFR), Tom Bird of Van Dalen Recycling UK, described efforts to limit scrap exports as “very dangerous” and also unnecessary. “There is ample scrap in Europe for domestic steelmakers,” he insisted to delegates.

The meeting of the BIR Non-Ferrous Metals Division was also warned of “a growing protectionist approach from governments” in their bid to “secure the raw material availability for their industries”. Divisional senior vice president Peter Dahmen of Germany-based Metallhandelsgesellschaft Schoof & Haslacher mbH & Co. also suggested “environmental concerns” are being given more frequently as a reason “to complicate exports of non-ferrous scrap”.

He continued: “In order to have better tools to present our position and the importance of our industry, and in order to fight the growing protectionist government activities, the Non-Ferrous board decided today (May 30) to launch a detailed worldwide study on non-ferrous scrap, its consumption in the different countries, areas and regions of the world, and the scrap flows around the world.”

Leading metals market researcher CRU is to conduct the work and will focus initially on aluminium and copper with the aim of presenting findings to the divisional round-table meeting in Barcelona, Spain, this October.

Protectionist pressures in Spain and Turkey were also mentioned during the BIR Paper Division meeting in Rome, during which it was said that shipping freight rates between Europe and Asia had soared around US$ 900 (£579) per 40-foot container - or around US$ 40 (£26) per tonne - since the start of the year. BIR plastics committee chairman Surendra Borad of Gemini Corporation in Belgium suggested the steepness of these increases was undermining the credibility of the shipping industry among exporters of recyclables.

Ian Martin provided communications coverage for BIR for this year’s event.

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