Scrap at risk from towering prices - BIR

B I R B E I J I N GAccording to Ildar Neverov of TeplotovResource inRussia, increasing domestic demand for stainlesssteel scrap could lead to a reduction in his country’sexports which currently stand at around 600 000tonnes per annum. Government measures designedto eliminate VAT fraud had served to create onlyuncertainty, and ‘significant legislative improvements’were required to solve this problem and ‘makethe industry more transparent’, added the speaker.Uncharted watersBarry Hunter of US-based Hunter BenMet Assoc.contended that the stainless steel scrap market hadentered ‘uncharted waters’ in terms of wholesalebuying prices. ‘General knowledge of all availablewholesale buying prices has allowed those willing tosell material into this highly-competitive wholesalemarket to basically dictate pricing for individualloads,’ he said.Operating rates of the major US mills were ‘asclose to 100% as production will permit’ while orderbooks appeared set to remain strong throughout thethird quarter. ‘North American Stainless, perhapsour largest flat-rolled stainless producer, hasalready announced tonnage allocations for customerson new orders,’ he noted.Strong domestic demand and limited scrap availabilityhad impacted on US exports, with shipmentsdropping 15% between the final quarter of 2005 andthe first quarter of 2006. Furthermore, US exportvolumes in February and March were, respectively,30% and 35% lower than in January. For themoment, Asian buyers appeared unwilling to‘aggressively compete for material’, said Mr Hunter.Scramble for metalMr Hunter also read out the report submitted byStuart Freilich of US-based Universal Metal Corp.which pointed to continuing strong demand forhigh-temperature alloys and titanium alloys, notleast because major manufacturers were ‘scramblingto secure metal in order to increase their productionrates of military and commercial aircraft’.The ferro-titanium market had been ‘in the doldrums’during the third and fourth quarters of lastyear but was showing signs of renewed strongdemand, he added. This was helping to prompt anincrease in ferro-titanium scrap prices.After four years as Chairman of the BIR StainlessSteel & Special Alloys Committee, Mr Giulianistepped down in favour of Michael Wright, whoworks for ELG Haniel Metals Ltd in the UK.Barry Hunter of US-based Hunter BenMetAssoc. (left) and Ildar Neverov of Teplotov-Resource in Russia.Guest speaker Markus Moll, ManagingDirector of Austria-based Steel & MetalsMarket Research (SMR), and Director GeneralLindsay Millington of the British MetalsRecycling Association.