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American Scrap Coalition for stopping scrap exports to Turkey

American Scrap Coalition is urging the Export Import Bank of the United States to stop assisting with exports of steel scrap to Turkey, which is now the leading importer of ferrousscrap from the US followed by Egypt and Greece.

It was reported in the recent past that the newly formed American Scrap Coalition said that foreign export restrictions on ferrousscrap constitute an issue of increasing urgency and called on the US government to make ferrousscrap trade issues part of international trade negotiations.

Mr Alan Price counsel of coalition has said that "the US should look to eliminate foreign scrap export tariffs as part of its trade negotiations including both World Trade Organization matters and bilateral agreements. These barriers need to be dealt with more directly than they have been before."

He cited Russia's new proposal to increase ferrousscrap export tariffs to USD 120 per tonne to USD 130 per tonne. This is a dramatic step backwards for Russia, which had promised to reduce steel tariffs as part of their application for membership in the WTO."

Mr Price said that some countries, like Saudi Arabia, Azerbaijan and Uruguay ban ferrousscrap exports, while others have onerous export tariffs, including Vietnam at 35% and Pakistan at 20%. He said that "Our scrap users face higher prices and lower availability of scrap supplies because of other countries' policies.”

Mr Tom Danjczek president of the Steel Manufacturers Association, said the spike in US ferrousscrap exports has been driven in part by restrictions around the world. US ferrousscrap exports grew to 18.3 million tonne in 2007 from 6.3 million tonne in 2000 and are now on pace to exceed 22 million tonne in 2008.

The surge in scrap prices, he said, has compressed margins for steel makers. He offered an example: Just a few years ago, USD100/lt scrap went into USD 500 per short tons steel products, a cost component of 20%. Now, he explained, USD 600 per short ton scrap goes into USD 1,000 per short ton steel products, a cost component of 60%, triple that of just a few years ago. Mr Danjczek said that increased steel costs driven by rising scrap prices will impact US steel consumers in the construction, automotive and appliance sectors, among others.

Mr Al Lucchetti president of The Cumberland Foundry and immediate past president of the American Foundry Society said that scrap price increases had hit many foundries particularly hard. He said that "With the increased scrap surcharges, it's impossible to get any other increases to cover other rising input costs like energy insurance and labor.”

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