Non-ferrous margins fell in 2015, costs escalated: BIR Convention

The Bureau of International Recycling (BIR) Annual Autumn Round-Tables Conference held recently in Prague noted that non-ferrous industry had a very tough year in 2015. The confidence level among industry participants hit lowest level during the year. The industry suffered large due to thin margins and rising costs.

According to David Chiao, President, BIR Nonferrous Metals Division, the prevailing bad economic condition has led to significant cuts in company budgets and major alterations to earlier announced employment plans.

The market summary report presented by Board member Nick Rose noted that nonferrous metal prices witnessed significant declines during the year. LME Nickel prices saw sharpest cut of nearly 35% during the year, followed by Zinc which registered 23% decline. Also, LME Aluminum and Lead prices too have declined by 12% and 9% respectively.

According to the report, slowdown in Chinese economic growth and devaluation of Chinese currency played key roles in damaging trader’s confidence. By and large, the market in India managed to hold on when compared with other markets, the confusion caused by introduction of new pre-shipment inspection rules and the opposition raised by world bodies has affected the industry. Nonferrous market volumes continued to remain weak in the European region, Rose noted.

The Conference observed that the nonferrous industry has witnessed tremendous capacity additions over the past several years, on the back of strong demand from China. With Chinese demand falling, many of those added capacities will vanish. The stronger players will survive and perform key role in leading the industry to sustainable growth.

Earlier during the Conference, William Schmiedel, President, BIR Ferrous Division had stated that ferrous scrap prices are likely to remain under pressure, at least in the near term on account of high scrap inventory levels and weak rise in mill demand.

The BIR Annual Autumn Round-Tables Conference was held October 25th to 27th in Prague, Czech Republic.