Raw Material Suppliers at IREPAS: Scrap collectors may consolidate for sustainable future

Tuesday, 24 March 2015 14:08:54 (GMT+3)   |   Istanbul
       

Speaking on March 24 at the SteelOrbis 2015 Spring Conference & 72nd IREPAS Meeting in Paris, Jens Björkman from Stena, the chairman of the raw material suppliers committee, indicated that since the last IREPAS meeting, scrap supply has found other places to go such as the Arabian Gulf, the Indian peninsula, as well as Turkey.
 
Mr. Björkman pointed out that the whole supply chain is suffering from overcapacity, from mills and mines to scrap collectors. He said that some companies have scrap sites that are not profitable and will have to shut down. For a sustainable future, scrap collectors might have to consolidate, he said.
 
The Stena official pointed out that the domestic supply and demand situation in the US during winter has been tough, with harsh winter conditions affecting scrap collection. Besides, the decline in scrap prices also contributed to the 15 percent reduction in scrap collection. He added that demand in the US has also been affected by lower demand in the gas and oil sectors.
 
Regarding the EU, the raw material suppliers committee chairman said that demand was subdued but relatively healthy in the last few months, with the weaker euro serving to protect the industry somewhat. Commenting on European Commission restrictions on scrap exports, he said that "it never really gets farther than a discussion point", adding that there are already obstacles in EU legislation which restrict exports. However, he reiterated that he does not see restrictions going further than that.
 
Replying to a question on whether major iron ore producers are becoming a monopoly, Mr. Björkman said that these miners are just trying to gain higher margins, adding that the industry will continue to see high supply for a while before more and more smaller miners start shutting down production.

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