No reason for scrap metal industry to be pessimistic, suggests VDM survey

BERLIN (Scrap Monster): The recent survey conducted by the German metal traders federation VDM states that there is no reason to be completely pessimistic about scrap metal industry. The participants of the survey noted that the industry is definitely passing through difficult times and that the present conditions may worsen further. However, they see a ray of hope in the long run.

According to participating metal recyclers in the country, the economic situation has been at the worst levels currently. Almost 23% of the respondents noted that their current state of business was worse when compared with the same month a year before. The industry is currently passing through its worst economic situation since 2013, they noted.

The anticipated weak performance by the industry is likely to cause further downturn in business. Almost 25% of the survey participants noted that ‘significant’ Chinese overcapacity, weak European industrial production and lower commodity prices has presented extremely challenging situation for traders and recyclers.

Meantime, VDM president Thomas Reuther noted that there has been a significant rise in the number of survey participants who believe that things may turnaround in the upcoming months. Almost 13% of companies believe that situations are likely to improve. In the previous survey conducted a few months before, only 10% had expressed hopes for improvement. According to Reuther, the survey results suggest that there is still light at the end of the tunnel and that there is no reason why companies should be extremely pessimistic.

The survey indicates that almost 50% of the country’s recyclers are concerned about the drying supply of non-ferrous scrap including copper, aluminum and zinc. The availability of non-ferrous scrap remains extremely tight, Ruether said. Almost one-third of the survey participants believe that the nonferrous scrap supply shortage is likely to continue, whereas only 9% expect an improvement to this situation. According to the survey, one-fifth of traders aim to cut short their inventories. Only 15% plan to restock scrap during the second quarter of 2016.