This year, the global recycling industry experienced an unprecedented challenge – the COVID-19 pandemic, which caused many changes in business strategies and processes. Davis Index spoke with Klaus Peter Riggelsen, chief executive officer, Rimeco A/S about how the market has adapted to the new normal.
What is the current situation in the recycling industry in Scandinavian countries?
Recycling, like many other industries, has been deeply impacted by the pandemic both on the supplier as well as the customer side. It forced many companies and their suppliers to suspend operations. Mills postponed deliveries and the whole supply chain came to a halt in some areas, because of the uncertainty in supply and demand. However, the market sentiment has improved since July as steel mills have better-than-expected orders for their products. We anticipate this trend to persist in Q4 2020 and strengthen further Q1 2021 onwards.
Scrap inflow remains slow even after the industry resumed operations in June because of which, the availability of the material is low and limited from our region.
What is your outlook on the demand for ferrous scrap in Europe?
The demand for material in European countries was stable in June. Ferrous scrap demand began increasing in August and is expected to improve further in September due to the end of the summer vacations. Business activity in the European scrap market will stay robust through the rest of the year and will strengthen going into 2021.
What are the prospects for ferrous scrap exports to Turkey this year and in 2021?
We have increased our scrap shipment to Turkey every year, and this year has not been an exception despite the business challenges. We see a positive development in our business relations with Turkey, where the demand for high-quality scrap is increasing. Turkey is a very promising market and we are looking at close and long-term supply relationships with several Turkish mills.
What is your scrap price forecast for the near future?
Scrap prices are more than likely to increase further due to the tight supply and improving demand worldwide. However, much will depend on currency fluctuations (whether they are USD/EUR or TRY/USD or GBP/USD) that are presently driving the export market.