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US, China are ‘scrap hubs’ to watch in 2013: Stein

Keywords: Tags  China scrap, U.S. scrap, Alter Trading, Robert Stein, Fleur Ritzema

LONDON — The United States and China will continue to be the driving forces of the global scrap industry, according to one scrap industry executive.

Automobile demand and the housing sector will continue to dominate as scrap’s drivers, Robert Stein, senior vice president of nonferrous marketing at St. Louis-based Alter Trading Corp., told AMM sister publication Metal Bulletin in an interview.

China’s domestic industries are expected to continue to grow this year.

"China clearly has vast infrastructural demand," Stein said.

Both the U.S. automotive industry and housing market are also seen as strong.

"The country to watch is the USA. People have written it off, but it has good demand and good energy potential," he said. "In the two major sectors affecting scrap demand—automobiles and construction—things are becoming steadier."

Goldman Sachs Group Inc., New York, said this week that an encouraging outlook in China and the prospect of a U.S. housing recovery will bolster metals demand in 2013.

Additionally, General Motors Co., Detroit, and Ford Motor Co., Dearborn, Mich., have projected higher 2013 vehicle sales.

"In almost all (nonferrous) metals, there is not enough scrap. ... The gap between supply and demand is likely to grow further," Stein said.

While some have tipped Vietnam and India to be new major players in the market, Stein is less than convinced. "Vietnam doesn’t have the population. It’s not a big market," he said. "The other likely candidate would be India, but I just don’t think it’s going to happen. I don’t know if India has room to grow."

Stein, who is also nonferrous president of the Bureau of International Recycling (BIR), Brussels, stressed that the scrap industry continues to tackle long-running obstacles, including scrap theft and government intervention.

The BIR has voiced concerns about the potential problems caused by protectionist measures used by governments to control or limit the international trade of scrap.

But the international flow of scrap metal isn’t what is currently making scrap expensive, Stein said, instead attributing it to a combination of underlying metals values and lower supplies.

But the biggest concern for Stein is the state of the world economy. "It always boils down to the economy. So much of our business is psychological. We want people spending," he said.

A version of this article was first published by AMM sister publication Metal Bulletin.

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