n° 162 – September/October 2019

2019 looks like one of those years we will never forget. At the same time, it is impossible to forecast future markets in our non-ferrous world and so we should say to ourselves that we don’t have to be smarter than the rest; we only have to be more disciplined than the rest to survive in this storm of uncertainty.

Uncertainty is poison for all industries and investment decisions. Owing to the US/China trade dispute, the German economy has slowed and is expected to shrink further in quarters three and four. The employment market is witnessing a shortage of well-trained people across all branches; fewer young people are choosing the manufacturing sector for a job.

Ferrous scrap prices have been dropping for a number of weeks. The downward trend leads to a stocking strategy when the average purchase price is too high and to less collection activity by smaller companies. The stocking of ferrous is influencing non-ferrous sales as companies try to cover their costs by selling their non-ferrous stock. At the same time, less street collection also means less non-ferrous will be collected, and this might have an effect in the coming weeks for some clean grades which are already in short supply.

Generally, it is a buyer’s market for nearly all metals. Copper and aluminium smelters are requesting less scrap as their own order books are no longer full as they were a year ago. Larger companies in, say, the automotive sector are cancelling or postponing existing contracts and creating a pressure on ingot and cathode producers.

The uncertainty described above leads to a domino effect on the market as a result of lack of trust heading into the coming months. It is a hand-to-mouth market where only the tonnage and quality of existing orders are demanded, and nothing else. As mentioned above, we have to be more disciplined in our branch and, as I always say, business is done when the money is in your account and not when the contract is written. So choose your business partners wisely in the coming months.

Prices in the aluminium industry look like they found the bottom after a freefall over the last six months. Copper cathode premiums in the different parts of Europe are building the natural framework for mill finished scrap in terms of premiums and discounts.

Murat Bayram - Murat Bayram (Germany)

Murat Bayram

European Metal Recycling Limited (GBR), Board Member of the BIR Non-Ferrous Metals Division

n° 162 – September/October 2019