Recycled steel market collapses as Corus values material at zero

Corus had been paying £10/tonne for scrap steel, which is used in packaging, last week, a figure that was already hugely depressed after falling from £95/tonne at the start of October. In May, it was paying £235/tonne for the material.

However, as of this morning, that figure has been reduced to £0/tonne, indicating that there is simply no market for recycled steel at present.

Corus said that the price collapse had been caused by a massive decline for steel products in the construction and automotive industries, which are at a virtual standstill due to the credit crunch. Poor demand from China and India is also behind the low prices.

Corus Steel Packaging Recycling manager David Williams said: “We’ve been told to expect 6 months of a difficult situation. It might pick up in the new year.”

He added that a turnaround in demand from the Asian economies would also help the situation.

The collapse in demand has hit a number of other materials and is likely to be bad news for local authorities and other organisation who rely on sales of collected waste for recycling.

Williams said: “It’s still very expensive to send waste to landfill so as long as the value doesn’t drop into minus figures it will still be attractive to send materials for recycling.”

Corus said in a statement that it remains committed to the recycling of packaging waste in the UK and added: We understand the importance of recycling this material and will provide a market wherever possible.

A spokeswoman for Corus Steel Packaging Recycling said that the £0/tonne value was a temporary measure, although it is unclear when demand is likely to pick up again.

CanRoute is a network of steel recycling centres that is managed by Corus Steel Packaging Recycling and has collected more than 200,000 tonnes of domestic steel packaging since its launch in June 1999.

It collects scrap steel from local authorities, waste collectors and community collection schemes including kerbside collections and can banks. The steel is then prepared for recycling by Corus.