In 2007, approximately 482 million tonnes of recyclable
ferrous metals were utilised in global steel production. Although
industry fundamentals have weakened markedly in line with the
world-wide economic and financial crisis, these fundamentals should
again improve once the economic outlook and conditions improve. Healthy
demand for raw materials for steel production in China, South Korea,
Turkey, Russia and India should as a result again resume. Scrap metal
became increasingly popular due to the lower emissions it produces.
Reclam Group's pricing is determined by global prices.
As raw materials make up an increasing
proportion of overall costs, steel makers are continuously looking for
more cost effective inputs, and scrap is an ideal solution.
Since the early 1990s, the use of recyclable ferrous
metals in steel manufacturing has grown dramatically. Global demand for
recyclable ferrous metals has over the last few years shown an
increasing upward trend. Total global crude steel production increased
from 1.05 billion tonnes in 2004 to 1.344 billion tonnes in 2007.
About 200 million tonnes of scrap is traded internationally each year, of which about 90 million tonnes are seaborne trade.
South Africa's recyclable ferrous metals market is in excess of 3 million tonnes per annum.
Non – ferrous metals
Consumption of non-ferrous metals has increased
considerably in emerging markets before the onset of the world-wide
economic and financial crisis, but has as a result decreased in recent
months. The growth in supply has been limited by labour issues, natural
disasters, a decline in asset quality, increasing capital and
South Africa's recyclable non ferrous metals market is approximately 400,000 tonnes per annum.
Reclam Group exports recycled ferrous metal products to
various steel producers primarily situated in Malaysia, India and
Taiwan. Processing locations throughout the coastal regions in Southern
Africa, combined with attractive sourcing of raw materials in the
southern African market and South Africa's location relative to major
importing regions, enable us to compete in international recycled
ferrous metal product markets.
Sources of Supply:
Reclam Group purchases recyclable ferrous raw materials
from a variety of industrial companies, the informal sector and
merchants in South Africa and neighbouring countries. These raw
materials include steel, iron and other by products from industrial
manufacturers in the steel industry, and obsolete materials such as
cars, appliances, machinery and equipment, and building and other
structure demolition projects.
The company's ability to purchase a wide
variety of recyclable ferrous raw materials, ranging from small to
extremely large, as well as to accept deliveries at numerous collection
points in relatively close proximity to suppliers, make Reclam Group
the preferred customer in many instances.
The strong relationships we have developed with suppliers
over the past 20 to 30 years position us well to increase our access to
the pool of recyclable raw materials located in South Africa and
We buy a significant portion of our recyclable raw
materials from hundreds of scrap metal merchants, or dealers, based on
long standing relationships across South Africa. Our geographic
coverage, product range and capacity to handle a wide variety of types
and volumes of recyclable raw materials give us a competitive