copper mining and smelting group KGHM Polska Miedź SA is
considering investing in a new furnace to process copper scrap,
market sources told AMM sister publication Metal
discussed whether to proceed with the development of the plant
at its annual general meeting June 19.
The company has not
yet made a final decision on the type of furnace it will build,
and it is possible that it will look to develop a plant that
will give it a foothold in the processing of complex secondary
raw materials such as e-waste and residues, a source familiar
with the matter said. The plant would be unlikely to be brought
online before 2016 or 2017, he added.
The decision to
proceed with the investment will be made against a backdrop of
a significant tightening in the European scrap market, which is
making it difficult for existing secondary producers to secure
The global scrap
market has been constrained throughout the year as scrap
generation has dropped in industrial and consumer sectors. In
addition, availability has dropped sharply since April in
response to lower primary copper prices on the London Metal
And supply to the
Chinese market has been hurt by Operation Green Fence, with
customs authorities holding back or rejecting copper scrap
consignments heading into the country (
amm.com, May 16). Several secondary producers in
China have announced plans to close capacity due to the
critical shortage of scrap there.
While the European
supply situation is less critical than in China, market sources
still questioned whether adding new secondary capacity in the
region is wise, given that producers are already competing
fiercely for material.
Unless LME prices
rebound and spur scrap collectors to release more material to
the market, availability this year will be worse than it was in
2009, when LME prices collapsed, market sources predicted.
While choosing to
invest in a furnace that can treat complex raw materials will
help to broaden its supply base, KGHM may still find it
difficult to carve out a position alongside established
competitors such as Hamburg, Germany-based Aurubis AG or
Stockholm-based Boliden AB, market sources suggested.
The company may,
however, have an advantage in sourcing scrap in the eastern
European markets, sources said.
KGHM did not respond to a request for comment.
A version of this article was first published by AMM sister
publication Metal Bulletin.