BIR World Mirror on Non-Ferrous Metals - Issue December 2015

Pessimism among China’s scrap consumers

The past few weeks have been far from peaceful given the terrible tragedy in Egypt, the terrorist attacks on Paris and the Brussels terrorist manhunt. We send our condolences to the families of the victims and wish our Brussels office staff keep safe and sound. Hopefully, their lives will return to normal soon.

Overall, the global economy isn’t any better off than it was a month ago and is facing many uncertainties. The strengthening of the US dollar has brought down almost all commodity prices while China’s economy is not faring any better, with weak demand getting even weaker.

At the 2015 Annual Convention of the China Nonferrous Metals Industry Association Recycling Metals Branch (CMRA) in early November, it was confirmed that all the uncertainty is prompting Chinese consumers to adopt a pessimistic buying stance. At one of the sessions consisting of foreign scrap suppliers and Chinese buyers, it emerged that an increasing number of China’s non-ferrous alloy consumers are using primary grades, refined grades and copper cathode rather than their traditional scrap input. Certainly, that is a threat to our industry, although all business entities are supposed to control their own costs of operation.

Not only is the overcapacity in primary metals production very serious, the hidden fact is that primary metals producing provinces and regions are facing an even tougher task to balance their budgets.
In mid-January 2016, I will form a working group to devise the programme for our meeting at the BIR World Recycling Convention in Berlin next May/early June. In the meantime, I wish you all health and happiness.

by David Chiao
Uni-All Group Ltd (USA)
President of the Non-Ferrous Metals Division
25th November 2015

Read the full market report in our members' area.