Chinese fear scrap consolidation, others skeptical

Nov 22, 2010 | 10:27 AM | Shi Lili

Chinese scrap buyers claim they are being disadvantaged by consolidation in the industry, particularly in the United States.

At an industry event earlier this month in China's Zhejiang province, Chinese buyers said such activity will leave pricing control in the hands of just a few players—akin to what has occurred in iron ore.

"Chinese scrap buyers are in quite a negative position in scrap metals trading right now, and one of the most important reasons is that scrap resources are getting more and more consolidated," one big zorba buyer located in Nanhai, Guangdong province, said at the China Nonferrous Metals Industry Association Recycling Metal Branch (CMRA) meeting in Ningbo.

Big companies such as Sims Metals Management Ltd. and Commercial Metals Co. "are quite active in big merger and acquisition deals," the zorba buyer said.

"This makes Chinese buyers have less suppliers to choose from and less bargaining power as a result," he said.....

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