German metal recyclers see troubles ahead

BDSV survey of ferrous scrap recyclers reveals freight worries, pessimism for 2019.

November 23, 2018

The Düsseldorf, Germany-based BDSV ferrous scrap recycling association says its industry survey reviewing 2018 has revealed ferrous scrap recyclers appear less optimistic about the future.

Just 7 percent of the surveyed companies expect a better business situation in 2019, according to the BDSV. “As a result of the United States tariff policy, increasing trade disputes, high public debt of important consumer countries for steel scrap (such as Italy and Turkey, to name only a few examples), the risks to economic growth are rising,” writes the association.

Year-on-year volume growth in 2018 is likely to fall short compared to 2017, the BDSV survey indicates. Surveyed recyclers also point to labor problems and government interference in Germany. “Above all, the shortage of skilled workers and increasing bureaucratization are cited as obstacles to growth,” according to the BDSV. “The scarcest resource is currently truck drivers.”

Also cited as problems by survey respondents in Germany are “years of neglected maintenance of the transport infrastructure” and “logistics bottlenecks exacerbated by the long-lasting drought that is severely hampering inland waterway transport.”

Cargo barges cannot be fully loaded because of low water, causing a need for more vessels—a need that cannot always be met. “For steel recycling companies, this means massive cuts in the operating business,” writes BDSV. “Material can sometimes no longer be accepted because there is no intermediate storage capacity. In addition, the cost explosion associated with scarcity in freight rates is weighing on traders' earnings.”

On the trucking side, new truck toll put in place in July 2018 on German federal highways may rise as early as January 2019, which “will put further pressure on costs,” according to the association.