December 02, 2008

ISRI supports efforts to remove global trade barriers

Ms Robin Wiener president of Institute of Scrap Recycling Industries said that she is pleased to see that the American Scrap Coalition has joined the bandwagon in support of the free and fair global trade of scrap, but seriously questions the coalition’s underlying premise that steel scrap processing and consuming industries are facing a steel scrap export crisis.

Ms Wiener stated that “Rather than a crisis, both the steel industry and the scrap industry are enjoying extraordinarily strong export markets due to the quick pace of global infrastructure development. In fact, finished steel exports alone have increased 81.5 percent since 2001.”

She added that “Scrap and finished steel are globally traded commodities. Efforts to artificially restrict that trade can have negative repercussions that are felt around the world. One effect that economists have noted is the potential for control reversal, where the implementation of export controls actually results in the opposite impact of what was intended to be achieved. That is why we have long taken an active position in support of free and fair markets by advocating for the removal of export controls around the world. As late as last month, ISRI attended meetings where we raised the issue of the need for free and fair trade practices between countries and continents.”

Mr Bob Garino director of commodities of ISRI said that “The price of scrap metal is only one of many components that factor into the overall price of finished steel. Higher steel prices are generally being driven by two major factors: higher global demand, primarily from emerging markets like Brazil, Russia, India and China, along with the Middle East, and the dramatic increase in the cost of raw materials. Since 2003, iron ore has risen 337%, while coking coal has risen 491%. While scrap auto bundles have gone up significantly during this same period it has been less than these other major raw materials.”