German scrap association BDSV has expressed its concern over the possibility of the European Commission imposing a tax on EU scrap exports.

During a Eurometal webinar on Thursday attended by Kallanish, BDSV manager Daniela Entzian said the effects of an export ban or tax “will be severe for us. With an export tax we wouldn’t have a level playing field”.

Scrap is traded as waste and a secondary raw material with strict treatment regulations. Entzian does not expect that a tax will be imposed by the EU’s trade department but sees more restrictions possibly coming from its environment department. The European Commission is revising waste shipment regulations, she says. The review will aim at restricting exports of waste that has a harmful environmental impact in third countries.

“Some politicians think that by keeping steel scrap in Europe, more steel scrap will be used and recycled in Europe, but we feel that the contrary might be the case,” Entzian observed. “This [scrap export restriction] would create a situation of lower prices and fewer incentives to collect and recycle.” If European exporters are not able to sell to large importers like Turkey, it would have a negative impact on their prices in Europe and it would be hard for member states’ scrap companies to remain financially strong, Entzian warned.

Germany exports over 80% of its scrap production to European countries and 16% to third countries. The largest buyer of German scrap is the Netherlands, followed by Italy and Belgium in third place. The Netherlands and Belgium export large tonnages of scrap to other non-European countries. About 20 million tonnes/year of scrap is exported from Germany. With 22.6m t/y, the EU remains the world’s largest scrap exporter followed by the US with 16.9mt, Kallanish notes.

Sources in the market believe the lobby of European steelmakers will manage to convince Brussels to implement a tax on scrap exports. The quest to curb scrap shipments stems from producers' fears that China may buy massive scrap tonnages from Europe.