Non-Ferrous Metals Division: Restriction of International Scrap Trading “Leads to Less Recycling”

“The post-COVID comeback for our industry has been strong when you look at overall trade volume,” acknowledged Dhawal Shah of India-based Metco Marketing in his first webinar as President of the BIR Non-Ferrous Metals Division. But he also told those watching the broadcast on November 2 that “unpredictability and hyper-volatility” are keeping non-ferrous metals recyclers “on the edge of our seats”.

Describing the current “chaos” as “completely unprecedented”, he listed the following challenges facing the sector: metals prices “at almost historical highs with intra-day volatility of up to 5%”; supply disruption owing to “high freights and container logjams”; “skyrocketing” prices for alloying inputs such as silicon, magnesium and manganese; semiconductor and energy shortages impacting industrial output; bond default worries; and high inflation.

As for regulatory concerns, Mr Shah drew attention to an imminent European Commission proposal to revise EU waste shipment regulations in a way which could severely impact scrap flows. On this subject, Murat Bayram of European Metal Recycling pointed out that the use of raw materials from recycling in production processes saves on resources, energy and CO2 emissions, while international trade ensures these materials “arrive where they are needed”. To which he added the following question: “Don’t other countries outside the EU have a right to sustainable production?”

Mr Bayram concluded with this impassioned plea: “The trade in raw materials from recycling must be promoted much more strongly to enable sustainable production everywhere in the world. In short, less trade leads to less recycling, more trade leads to more recycling.”

On this issue of restricting scrap flows, Eric Tan of the Malaysia Non-Ferrous Metals Association warned that, in their current form, new guidelines for importing scrap would “cause more harm than good to the whole non-ferrous metals industry in Malaysia”. The key points of concern on which the country’s metals industry is continuing to lobby its government include thresholds of 0% for hazardous/e-waste and 94.75% for metallurgical content which, the speaker warned, would affect 80-90% of Malaysia’s scrap imports. Furthermore, said Mr Tan, the proposed pre- and post-shipment inspection regime would damage Malaysia’s competitiveness in terms of scrap procurment.

Also as part of discussions moderated by Natallia Zholud of TMR Group in Belarus and José-Martin Neumann of TSR Recycling GmbH & Co. KG in Germany, Mr Shah spoke of the Indian government’s proposed introduction of scrap classifications or standards in a bid to obtain cleaner, higher-quality raw materials. To be implemented possibly within the next six to nine months, he said, these could include limits for metallic and non-metallic impurities.

Reviewing developments in China, Shen Dong of OmniSource Corporation in the USA pointed to recent power consumption restrictions leading to the temporary idling of some industrial facilities, including smelters.

The impact of the energy crisis was also addressed in a guest presentation from Franco Dalpiaz, Director Raw Material Purchasing at major Italy-based recycled aluminium alloys producer Raffmetal SPA. Power rationing in China had “drastically” reduced magnesium deliveries to Europe where stocks of the alloying metal are expected to run out by the end of November, he said. This could lead to production stoppages in the aluminium value chain affecting, for example, the automotive and packaging sectors.

Mr Dalpiaz also highlighted the need to find solutions for the zero-emission use of the internal combustion engine with renewable fuels. Failure to do so would result in large volumes of end-of-life vehicle scrap coming forward in 10 to 15 years from now “with issues in finding buyers”.

Source: BIR (Brussels, November 03, 2021)