Scrap steel market in UK at peak performance

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.