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Kallanish Kallanish

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August, 8th 2020

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JUN 24

Turkish ferrous scrap demand supports recycling revival: BIR


The return to frontline business in the metals recycling sector is happening much quicker than expected, supported by Turkish demand for ferrous scrap, says the Bureau of International Recycling (BIR).

The Covid-19 pandemic has been “…devastating,” BIR’s ambassadors say in their latest Covid-19 update, but “…some light can now be seen at the end of the tunnel.” Demand is nevertheless likely to remain low for many commodities in the near term.

Secondary aluminium has been severely affected by the lack of demand for ingots from the automotive and aerospace industries. Demand has been equally low, if not worse, for nickel and molybdenum. The stop in automotive production has also hit demand for chrome steel and ferro-titanium, BIR says.

“Manufacturing and the generation of new production scrap are very slow and limited, and no real pick-up is envisaged until the end of July,” BIR observes in a note seen by Kallanish. Two key sectors for the metals business – oil/gas and aerospace – are facing a very difficult downturn, thus impacting not only scrap generation but also demand for nickel and moly alloy scrap. The outlook for tool steel and high-speed steel is linked to the pace of manufacturing revival, BIR points out.

A major concern for recyclers has been the huge congestion caused by thousands of containers lying in Indian ports despite free extensions by some of the major shipping lines. “More disturbing is the fact that some buyers have abandoned containers, seeking deferment of contractual terms, unjustifiable discounts or even cancellation of contracts,” BIR says. “This has put major worldwide suppliers in a ‘Catch-22’ situation and has been described as an unwelcome echo of the 2008 financial crisis.”

In the EU, step by step, scrap activities are returning. With the restarting of the automotive industry, supply noticeably improved in May and June. “Transport within Germany is functioning but there is an expectation of lower water levels for several rivers owing to the dry period in recent weeks, and so scrap movements via inland waterways might suffer as a result,” BIR concludes.