A leading UK scrap metal recycler has warned that demand in the EU remains slow, but duty changes last month to protect European steel makers from Chinese ‘dumping’ may help the difficult market.
Tom Bird, pictured, managing director of Mettalis Recycling, gave an overview of the market in the latest report issued by the Bureau of International Recycling (BIR).
Bird, a board member of the BIR ferrous division and president of the European Ferrous Recovery and Recycling, said the influx of Chinese products was continuing to dampen orders as well as scrap prices.
“Capacity levels across all parts of the EU remain low, with some operators still reporting levels some 40-50% below optimum. This has meant some of the larger scrap operators closing yards and, in addition, a number of businesses having to close,” he said.
On 29 January, the EU imposed new tariffs ranging from 9.2% to 13% on Chinese imports of steel bar used in construction.
“It is reported that the mills likely to benefit most will be Celsa, Riva and Arcelor - all significant scrap consumers. This is a step towards helping the sector, depending of course on how China reacts with its pricing.”
Bird noted that China in 2015 had exported more than the total production of India and some two-thirds of EU output.
“These figures are staggering and clearly illustrate the impact on world steel markets. There are moves within China to cut back production significantly but how these develop remains to be seen”.
Brighter news, he said, was increased interest rates in America which had strengthened the US dollar, helping the pricing of EU scrap. “Significant” reductions in ocean freight rates had helped exporters, he added.