Corus paints bleak picture of steel can market

David Williams, manager of Corus Steel Packaging Recycling, told an Associate Parliamentary group of MPs on Wednesday (February 12) that while the company recycled 100,000 tonnes of post-consumer steel in 2008 – roughly half of UK arisings – it was looking at buying only 0-50,000 tonnes in 2009 because demand for new steel had dropped by around 50%.

The news is likely to have serious consequences for councils and waste management companies who have historically relied on Corus to buys their cans and will force them to store their cans or continue using other markets.

Mr Williams said: “Last year Corus used 100,000 tonnes of past consumer steel. In 2009, this figure could be between 0-50,000 tonnes.”

“We are not buying any scrap for at least the first six months of this year – certainly no packaging scrap.”

Mr Williams said that while some other companies were still buying cans at low prices, Corus had effectively closed its can route collection centres and many steel companies were “simply looking to survive the downturn”.

He said: “At the moment we are not getting a great deal of flack from local authorities. That situation may however change.”

PRNs 

As a result, the manager of Corus Steel Packaging Recycling warned that the crisis was likely to impact “heavily” upon the availability of steel packaging recycling evidence – known as packaging waste recovery notes (PRNs) – which producers are required to buy to meet targets under the Packaging Waste Regulations. This fear was also evident in a meeting of packaging industry representatives earlier this month (see letsrecycle.com story).

He said: “Metal PRN supply will fall in 2009 after great success in 2008. I am in no doubt about that. We estimate there will be a shortfall of 95,000 steel PRNs in 2009.”

BMRA

Mr Williams' comments came at a meeting of the Associate Parliamentary Sustainable Resource Group in Westminster entitled 'Opportunity from Crisis: A new dawn for recycling?' which addressed the impacts of the economic downturn on the recycling markets.

Responding to Mr Williams' comments, Lindsay Millington, director general of the British Metals Recycling Association (BMRA) stressed that while there were some problems in the can market, the market for non-packaging metals was quite different. She explained that both demand and supply of metal was around 50-60% of what it had formerly been but that prices were not such as issue.

She said: “In terms of prices the prices for non packaging metals are nowhere near rock bottom. It anything we are just back to where we were in 2005. It's not the issue – the issue is volumes.”

WRAP

Despite volatility in the metal markets, Marcus Gover, director of market development at WRAP, told the meeting that export demand for recovered materials was generally increasing following a sharp fall at the end of 2008.

He also reported that local authorities were not stockpiling – contrary to impressions given to some reports in the media.

He said: “Our research shows export demand returning in recent weeks from Europe, India and especially China where the Chinese New Year break appears to have no impact on the steady market process. Lower freight charges and fuel costs, as well as the weak pound have also helped to boost overseas markets.”

“Survey evidence from local authorities indicates no significant stockpiles. Consistent data from the Environment Agency also suggests there has been no significant increase in storage.”

“The figures are certainly encouraging, but it would be too early to say if we have a turning point just yet,” he added.