Matthijs de Jong, the Project Manager of TSR Recycling in TSR RO Singapore, has kindly replied our questions during the SteelOrbis Spring 2011 Conference & 64th IREPAS Meeting , which was held between April 10 - 12, 2011 in Hong Kong.
Could you please tell us about the operations of TSR Recycling? What are the main activities of the company?
TSR handled over seven million metric tonnes of steel scrap last year and the company is the European market leader in the recycling of steel scrap and non-ferrous metals with 130 operation sites and nearly 2,000 employees in Germany and abroad. For TSR, steel recycling is an indispensable part of the recycling industry. TSR sees itself as a supplier to the steel industry and an intermediary between suppliers and customers. TSR is also active in trading in Scandinavia, Russia, UK, North Africa etc.
TSR has a 100% sister company, Euro-scrap Alliance BV. Euro-Scrap is responsible for all sales and trading which is done by sea going vessel within the TSR Group. Last year Euro-Scrap sold around one and half million metric tons into the Turkish market.
TSR Group's 60% of the shares are owned by REMONDIS AG & Co. KG, a company of water- and recycling management (based in Lünen, Germany). The remaining 40% shares are equally divided between CRONIMET Group and the Italian steel producer ALFA ACCIAI (20%).
Are your collecting scrap activities within Europe only and which markets do you generally supply?
Our collecting activities are mainly in mainland Europe & Scandinavia. We have joint projects in Croatia, St. Petersburg, Russia & the Baltic States. Last year we opened TSR Sweden and TSR Denmark because we would like to expand in this region as well. The majority of the mt are collected in Germany and Slovakia. Furthermore TSR owns 50% of HKS Scrap Metals in Holland (the other 50% belongs to TATA Steel Europe). The core business of HKS is the recycling of ferrous and non-ferrous scrap to create high grade raw materials for metal producers all over the world.
The biggest sales market for our group is Germany. The second biggest market is Turkey.
What is your responsibility area?
About 18 months ago we founded the TSR Representative Office (RO) in Singapore for market research and development of the Ferro Asian market. We also developed TSR Shanghai which is mainly focused on Fon-Ferrous export to China, which is the most important Non-Ferrous export market for the TSR Group. TSR Singapore is collecting market information and introducing TSR to the steel mills from Pakistan eastwards up to South Korea.
How do you see current global scrap markets?
We had the Raw Materials Comitee during the SteelOrbis Spring 2011 Conference & 64th IREPAS Meeting and the majority of the topics were about Japan. Although Japan is a very important market especially for China, Taiwan and Korea I find the situation in the Middle East more important for scrap market globally. It has affected finished (long) products and the biggest scrap consuming country Turkey directly.
In my opinion because of the radiactivity issue in Japan and the fact that the infrastructure has been damaged in the country, the volume of scrap going out from Japan to China, Korea and Taiwan might be less and these countries will have to buy scrap from elsewhere. However, the situation in the Middle East is the direct threath to the Turkish mills.
Whenever I talk to someone anywhere in the world about scrap prices, people always ask me "How is Turkey doing?" This is the first question, always. Are they buying? Are they waiting? When are they coming back to the market? Etc.
The last weeks we have been seeing that USD scrap prices stopped falling and have started to increase again. We have noticed that there is a bigger price difference between European 70/30 and USA origin 80/20. The mills clearly appreciate better qualities of scrap.
Is it possible to share your view about scrap demand in the short term?
I think the market is stable with price levels of USD 450/460/mt for USA HMS 80/20 & Shredded delivered Turkey and expect the markets to stay at these levels or slightly increase. Asian markets are stable as well with price levels around USD 465/mt for HMS & USD 480/mt for shredded delivered Asian port by container.
With the increasing inflation, higher oil and other commodities prices and the printing of US Dollars we will see a higher bottom level of scrap prices in the coming years. Last year we saw prices around USD 300 delivered Turkey which is a level i do not expect to see coming years again. At USD 360-370 levels suppliers are not selling anymore and just sit and wait especially with the weaker USD / Euro.