The Bundesvereinigung Deutscher Stahlrecycling- und Entsorgungsunternehmen (BDSV), an association representing ferrous scrap recyclers in Germany, is urging cooperation among steelmakers, scrap recyclers and freight companies in the face of a prolonged drought that has restricted ferrous scrap barge capacity and raised freight rates.
In an Oct. 17 message to its members, the Düsseldorf, Germany-based association says, “Extreme low water on the federal waterways is presenting the steel recycling economy with huge problems.”
The low water conditions have led to “significantly less loading capacity for scrap and secondary raw materials,” according to the BDSV, to the point that “contractual acceptance” of previously determined volumes at ports and steel mill docks “is hardly possible.”
At the same time, says the association, “Freight rates have increased dramatically.” On the Rhine, Main and Neckar river systems, typical rates of €10-12 ($11.34-$13.61) per metric ton have been replaced by €35-40 ($39.69-45.37) per metric ton rates. Adds the BDSV, “The alternative of transport by rail or truck does not exist, because there are also bottlenecks due to increased demand [in those sectors], and costs have exploded.”
Rainer Cosson, managing director of the BDSV, says scrap suppliers are currently bearing the brunt of the increased costs. “It cannot be right for the exploding freight costs to be [borne] by the scrap industry alone,” he states. “The extreme weather event and its effects must be supported in solidarity by all those involved in the value chain”
Cosson says the BDSV is “appealing equally to the producers of scrap as well as to the consumers of secondary raw materials to be open for constructive discussions about a fair sharing of the additional costs.”
An article in the BDSV’s October 2018 e-newsletter demonstrates the reduction in capacity per barge vessel when water levels drop. This results in the need for more vessels, which adds expense, if enough vessels can even be found.