Scrap metal prices saw further falls in October adding to uncertainty in the metals sector which has also seen the closure of the SSI steelworks in Redcar and proposed job losses at Tata Steel.
And, the price reductions are having a knock on effect in the WEEE recycling sector and for local authorities who are having to face up to reduced prices for light iron arising at civic amenity sites.
The head of the British Metals Recycling Association, Ian Hetherington said the Tata Steel announcement represented a “major blow” to domestic markets for steel scrap.
Commenting on the job losses in the steel sector, Mr Hetherington said: “It represents a further major blow to our home market for steel scrap. Our worst estimates mean 20% of our already diminished home market will disappear. Therefore in short this seriously weakens an already weak market for ferrous metals.
“We have got to a sad situation now where something like 80% of our recycled metal will have to be exported. So this is another move to completely undermine the domestic market for recyclables.
Commenting on the current situation with regard to local authorities, Steve Palfrey, chair of the National Association of Waste Disposal Officers, and head of waste at Suffolk county council, said that volatile markets were of concern and councils were now entering different types of contracts.
Mr Palfrey said: “An increasing number of authorities have risk, reward and share contracts and as we see markets becoming more volatile, this is a real financial concern for authorities.”
Some metals recyclers and WEEE reprocessors are said to be under particular pressure although the point has been made that metal prices have been lower than this, especially back in 2003, and that material is generally still moving to export markets. First indications for November are that there could be some stability being reached for some grades but that low prices still dominate the marketplace.
The low oil price has also weakened plastic recycling values whilst most non-ferrous metals are at levels not seen since 2008.