***BIR DIARY: EU delegates look east for answers as Istanbul congress kicks off

It’s warm in Istanbul, and some attendees of the Bureau of International Recycling (BIR) are a bit hot under the collar.

So far this year, the scrap sector has done pretty well.

Recyclers and merchants were quick to rein in processing and destock when steel prices collapsed, and prices rose progressively in the first four months of 2010 as mini-mills were forced to buy new cargoes or stop melting.

“I sold right there,” one delegate proudly told MB on the sidelines of the event, pointing at the peak of $463.26 per tonne MB’s Ferrous Scrap Index recorded for material delivered to Iskenderun on April 9.

Prices have since come off a bit, but now, as some construction in the Middle East, north Africa and Southern Europe starts to kick in, prices are rising again.

Most delegates at the first day, which concentrates on the ferrous end of the recycling scale, are hoping that this trend will continue. Exporters from Iran, Tunisia and other regions all count amongst those looking to get a share of the EAF market in this region.

But others are worried.

“Prices are very high at the moment,” another merchant said. “And they seem even higher when you look at demand for steel.”

True. While demand from the construction sector has started to pick up as the weather warms, the industry as a whole is still in a woeful state.

And steel consumers in other segments like manufacturing aren’t in much better shape.

High materials prices and poor demand for steel adds up to one thing, and it’s not good news for steelmakers, particularly EAFs. There are other problems as well.

“Things are much better than they were,” a source at one trade finance bank that focuses on secondary metals supply told MB over lunch. “But we’re still very worried.”

Important aids to trade like credit insurance are still hard to come by. And bankers are worried that the financial difficulties of 2008 haven’t all passed yet – the recovery that has been so much talked about could just be the eye of the storm.

“There’s a strong possibility of a second dip,” the banker continued. “The problems in Greece are a persistent concern, and there are still serious structural issues in the industry that worry us.”

As more bad economic news leaks from Europe, this time in Spain, most people are looking east for answers.

Despite initial concern, most speakers on the day’s first panel, which focussed on stainless steel scrap, agreed that tighter Chinese fiscal policy was no real threat to sustained growth.

China, India and other Asian countries will keep driving urbanisation along with Latin America, they said, and recyclers are counting on these countries to keep importing.

There are importers in Istanbul, and they are looking for supply. There are exporters as well.

“We are the only suppliers of this equipment in the world outside America, and we are the cheapest,” said an executive from one company supplying cable recovery equipment. “We already have a big market share in America, and now we are looking at Europe.”