Corus is absolutely staggered at the rate at which steel orders have fallen off and will now only pay £10 per tonne for steel packaging delivered to CanRoute collection centres throughout the UK.
The price has gone down from £235 per tonne in April of this year to £95 in September and £10 as from October 20. Corus say that this dramatic reduction is due to the global economic slow-down and the resulting decline in orders for new steel products.
At the same time Novelis has been forced to reduce the price of its aluminium used beverage cans for the second time in less than a week. Last week baled and densified cans were trading at £700 per tonne but have now gone down to £650 per tonne this week and loose and flattened cans went down from £650 per tonne to £600.
Novelis national manager Andy Doran said: Our prices are just reflecting the global economic position.
Corus steel packaging recycling manager David Williams told MRW: We are absolutely staggered at the rate at which speed of orders have fallen off. The steel industry acts as a barometer for the economy. But nobody is buying white goods, construction work has slowed down, the automotive industry is down 25%. We supply steel for all of these products and no one can really predict when it will come back.
By the end of the year Corus has decided to reduce its steel production by up to 30% around one million metric tonnes. We will rely on internal arisings and stock we already have.
In relation to scrap packaging we do not want to turn the tap off and we realise the importance of collecting it.
CanRoute offers a network of regional steel can recycling centres for local authorities, waste management companies and other collectors to trade cans in for cash.
Williams said: Steel packaging collection cannot be turned off and on like a tap. It is collected by local authorities, and from the kerbside week in and week out the material is being collected. We cannot turn it off when times are hard because times will eventually improve.
The situation does not bode very well for next years packaging targets if the situation carries on. Exports have dried up and this could mean no packaging waste recovery notes being raised which creates the spectre of not being able to meet next years packaging targets.
Corus says it does not plan to cut any jobs.
Local Authority Recycling Advisory Committee chair Lee Marshall added: Any loss on material price can have a huge impact on local authority income. It depends how much steel that local authority is collecting. As a percentage steel is one of the smaller components of the material base that local authorities collect.
It is worrying. We have to wait and see if other materials follow this lead or not. It is not likely to have a significant impact like dropping other materials, such as newspapers and glass.
He said that glass and newspaper were heavier in tonnage terms and aluminium and some plastics offered quite good prices.
He explained that the current financial crisis may affect local authorities negotiating private finance initiative contracts because if they get delayed it could have serious impacts for authorities trying to meet their landfill allowance targets.
Marshall said that ultimately the financial situation may hit local authorities and this may lead to changes in waste services.
Corus will reduce the output of its main sites of Port Talbot, Scunthorpe, Teeside and Rotherham in the UK.
Image: Corus steel bales
Previous story, Steel figures for Corus reach for the sky, (11/12/07)