Above: Edward Meir of Commodity Research Group addresses the BIR Nonferrous Division meeting.
Edward Meir, director of the U.S.-based Commodity Research Group, said tariffs “will create more problems than they will solve,” adding that they are “a very blunt instrument and can give a lot of unintended consequences.”
Meir addressed the Nonferrous Division Meeting at the Bureau of International Recycling (BIR) World Recycling Convention Round-Table Sessions in London in early October.
Describing the Trump administration’s trade policy as “dangerous and built on faulty assumptions,” Meir said the tariffs could “chill” business investment and lead to the cancellation of projects.
“U.S. scrap has been a big casualty” of the most recent round of tariff activity, which saw China retaliate to U.S. tariffs on Chinese goods by imposing tariffs on imports of U.S. scrap, among other goods.
Looking ahead to 2019, Meir predicted aluminum prices would trade between $1,910 and $2,380 per metric ton, assuming a resolution of the Rusal issue. (The U.S. threatened to placed sanctions on the Russian aluminum company starting Oct. 23.) As for copper, he forecast a price range of $5,600 to $7,200 per metric so long as there is some form of “truce” in the current trade war.
In his review of world markets, Mogens Christensen of H.J. Hansen Recycling Industry Ltd. in Denmark said the U.S.-China dispute was damaging scrap trade into China. China’s import restrictions and this ongoing trade war with the USA have translated into more American aluminum scrap finding its way to Mexico’s secondary smelters, he said. Meanwhile, India’s importers have been “hit hard” by the decline in the value of the rupee.
Prefacing a panel discussion on the topic of “Politics and recycling: a new era,” the session’s moderator Murat Bayram of European Metal Recycling Ltd. said rising protectionism has contributed to the “earthquake” currently rocking the scrap sector. He reiterated the view expressed by divisional President David Chiao of Uni-All Group Ltd., Atlanta, that China will “very likely close its doors” to nonferrous scrap imports by the end of 2020.
Michael Lion of Everwell Resources Ltd. in Hong Kong acknowledged the “extremely unpredictable” situation that currently prevails, with “too much scrap in the wrong places.”
The secondary industry in the USA cannot cope with the material now available, and some companies have been left with no choice but to move volumes for lower prices to maintain cash flow, said Andy Wahl of TAV Holdings Inc., Atlanta.
Dhawal Shah of Metco Marketing (India) PVT Ltd., Mumbai, identified the automotive sector as his country’s largest consumer of secondary materials, with its demand growing at some 10 percent annually. However, he warned against regarding India as the natural beneficiary of the changes taking place in China.
Bayram said the recycling industry “deserves praise for its contribution in reducing carbon emissions,” hailing the BIR-led Global Recycling Day as “a good way to tell the story that recycling is not an option but a necessity.” However, he added that the industry is experiencing “disruption” rather than the “functioning markets” that it needs to perform its valuable role.