BIR World Mirror on Ferrous Metals / Quarterly report - January 2016

PRESIDENT'S OPENING REMARKS
by William Schmiedel, Sims Group Global Trade Corporation

So what does 2016 hold for us all?

Probably none of us was sad to see 2015 come to a close. It was certainly a year of demand contraction across the whole commodity spectrum - from oil to ferrous scrap.

Before we look at what 2016 will bring, we should review a few of the interesting macro developments from last year:

• World crude steel production for 2015 was down almost 3% from 2014.
• The average capacity utilisation dropped more than 4% in 2015 compared to 2014.
• India surpassed the USA as the world’s third largest steelmaker, producing almost 90m tons of crude steel in 2015.

Commodity prices are now at levels last seen during the period from 1999 to 2002 and yet our costs are exponentially higher than at that time. Of course, everyone looks at China’s decreasing demand for many commodities as the major factor behind the erosion of commodity pricing. While this is part of the reason, however, it is also a matter of increased supply. Certainly this does not relate to an oversupply of ferrous scrap, but it is true for other commodities such as oil...

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