Scrap steel market in UK at peak performance
As a result of the
UK's highly developed consumer based economy and the surge in demand for life's comforts, indicated by record car sales and rising purchases of kitchen appliances, not only has a rise in demand for new products developed, but as many of these products contain steel, a large need to get rid of old products has also developed. These pitched products then end up in the quickly growing
UK scrap piles.
According to industry experts, if most of
UK's
scrap metal finds itself in countries with larger steel industries than Britain's, then the world's recycling mechanism is working smoothly. In fact, according to many industry analysts, the
UK system for recycling waste is the most efficient in the world. Accordingly, market news reports that this development translates into good news for
UK steel producers such as Corus, because as the global steel industry is booming, these producers are increasing their intake of
UK-produced
scrap.
Another explanation for the boom in
UK's
scrap market has been reported by the head of
UK-based Iron & Steel Statistics Bureau (ISSB), Steve Mackrell, who reports that since
UK's role as an industrial nation is lessening, most
scrap steel collected in the
UK is available for export, rather than being re-used domestically. Mackrell also points to
UK's highly efficient recycling industry as another factor in the country's success as a
scrap exporter.
According to statistics released by ISSB, this year exports of
UK scrap are expected to surpass £1 billion ($1.86 billion) in value for the first time. This projected rise of more than 30% comes as a result of the robust increase in steel prices and the huge increase in demand for
scrap metal from countries such as
China,
Turkey and
Spain. This likely increase would strengthen
UK's position as the number two global exporter of
scrap, after the US and before
Germany,
Russia and
Japan.
According to
UK-based European Metals Recycling (EMR) group, the biggest
scrap dealer in
Europe,
UK steel
scrap has nearly doubled in price in the past year to approximately £90/ton ($162) for basic
scrap, while
scrap with only a small amount of impurities can easily sell for double this price. For another example, a
scrap car can now obtain about £60-70 ($108-126) at a
scrap yard, compared to only about £35 ($63) a year ago. EMR handles approximately 8.5 million tons of
scrap annually, of which, 6.5 million tons come from Britain, and most of it is destined for steel plants outside Britain.
The
UK scrap industry is dominated by about 20 relatively large companies, one of which is Morley Waste Traders. According to the head of this company, in line with the expanding efficiency of the
UK scrap market, his company has increased the amount of
scrap it handles annually from 40'000 tons in 1990 to an expected 150'00 tons this year, and has invested £5.5 million ($9.89 million) in new machines over the past decade. However, he reports that as the value of
scrap has increased in the past year, it is increasingly difficult to obtain supplies. He explains this by the fact that one-man traders and other small groups have become more motivated in their hunts to collect
scrap material and thereby have removed a large amount of supply from the market.