Some interesting global trends have begun to emerge in the scrap steel recycling business. Looking east, the Association of European Producers of Steel for Packaging (APEAL) have announced that steel is the leader in packaging recycling in Europe with a recycling rate of 61 percent in 2003. Within the European Union 15 countries, APEAL is projecting a 3.4 percent growth per year in steel packaging recycling to 2008, ultimately reaching a recycling rate of 70 percent.
This contrasts, for example, with the 49 percent residential recycling rate reported for steel from Ontario’s blue box program. One of the reasons for the high recovery rate in Europe is the capturing of steel prior to incineration. It is also notable that APEAL reports over 80 percent recovery of industrial packaging in steel (drums, steel strapping, etc.) across Western Europe.
As we look farther east, China again comes into the picture as it has been with many recycled commodities. The Chinese economy continues to grow at an astounding nine per cent per year, with steel imports fueled by construction and production of durable goods. Beginning in 2002, Asian demand for U.S. scrap played a large role in propelling prices upward. This pattern continued through 2004 but it is uncertain if trend will hold in 2005.
Outside of international demand, higher scrap steel prices in 2004 were also influenced by increased manufacturing activities and a tight supply of raw materials. Coupled with higher energy prices, however, the manufacturing resurgence could be dampened.
Given all these varying influences, trends in 2005 remain unclear.
Contact Damian Bassett at 416-594-3457, ext 3457 or visit www.csr.org (CSR Sheet located under “Publications”)