Friday, June 27, 2008

Demand Of Scrap Metal In The Asian Markets



SCRAP METAL DEFINED: Let’s first know what is meant by a scrap metal. As we all know scrap is something that is worthless. But scrap metal is the discarded metal suitable for reprocessing. E.g. Scrap iron is the one to be melted again and reworked.



DEMAND OF SCRAP METAL IN ASIAN MARKETS: Before going into the Asian market alone, let’s see what the demand of steel in the overall market is. In a survey by Tom Stundza a purchase manager, it was noted that World steel consumption will increase by 6.8% by 2008. Alright let’s see what’s with Asian markets now. In a special report by Tom Stundza it was said that, there is demand for steel in the Asian market and will remain quite strong in China, North Korea, India, Italy and Japan.



DEMAND OF METAL SCRAP IN CHINA: Let’s go deeper into the Asian market. And starting with China, in case of development, China is the prime suspect. Obviously the demand for metal commodities is especially intense. According to a presentation by Daniel Gris world of CATO institute, Mexico, China’s metal consumption as a share of World metal consumption has jumped in the past decade from 10% to 25%.



Exports to the west from China are likely to decline in volume and the excess will be channeled into domestic market. If the Chinese government is successful in curbing exports of such energy-intensive products as steel, a sharper upturn in regional prices could be seen.



And in a report from The Institute of Scrap Recycling Industries it’s stated that Scrap has been the important export commodity from U.S. $15.7 worth where exported in 2006 itself. And the main fact is that, it was the second largest export to China in dollar value (Besides electronic components). And mainly the price for 316 stainless steel in China is 33750-units in RMB/MT.



DEMAND OF SCRAP METAL IN INDIA: In case of India, we can find that people inevitably want to compare India to Asia’s foremost scrap powerhouse, China. In an article by Mr. Goodman of ISRI, he states that, "You can’t say that India is next to China", he also adds that, " That’s unfair to both countries ". Why was he actually saying this? Here the reasons are:



• China has been a communist government which can focus enormous state resources on a particular industry or problem. While India in contrast is the world’s largest multiparty democracy with all messiness that entails.



• The second thing is population. The population of India is much less homogenous than that of China’s.



Oh! We forgot one thing! That’s the current price of scrap steel in India. As if today the scrap steel price in India is 9.63 INR & 12.04 INR for LTL and TL respectively (LTL- Less than Truck Load quantity refers to weights of less than 40,000 lbs unless otherwise stated, TL- TL prices refer to sorted and prepared materials, packaged and ready for shipment in typical Truck Load quantity weights of 40,000 lbs. unless otherwise stipulated.)



CONCLUSION: Hence to conclude, we can see that there has been a huge demand of metal scrap in past decades and also it’s been continued. For every development in the country, the demand eventually rises. In the view of ISRI members, India is far away from competing with some of the emerging markets. But according to me India is definitely growing fast and will be on the track soon. And this is the beginning of something. Let’s conclude with Goodman’s saying, " My goal wasn’t to come back with orders in my pocket . It was to find out how things worked".



Ref:



*ISRI’s pages to India



*Prices from metal prices .com



*Resources from Google scholar



*Article by Mr. Tom Stundza



* Presentation by Daniel Gris world of CATO institute, Mexico



*Articles of Mr. Goodman of ISRI.



*www.chinascrapmetal.com

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