From: Reuters
Published June 2, 2008 09:12 AM

Illegal European scrap dealers cause fierce competition

MONTE CARLO (Reuters) - A growing number of illegal scrap yards in Europe endanger the environment and increase competition for valuable scrap metals, European industry sources said on Monday.

Record metal prices, with copper hitting an all-time high of $8,880 per tonne earlier this year, have sparked a hunt for secondary raw materials.

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"The problem with illegal dealers is growing, it's enormous now because of high metal prices," said Bjorn Grufman, President of Eurometrec, the European federation of scrap dealers.

Their increasing number is hurting the reputation of the industry and because they do not follow any legal requirements it could pose an environmental danger, Grufman said on the sidelines of a Bureau of International Recycling (BIR) conference. BIR is the umbrella organization for Eurometrec.

"It is unfair on all the serious dealers...," he said, adding that theft from scrap yards had become more frequent.

"The barriers to entry in our industry are so low, which makes it easy for outsiders to set up a yard," Grufman said, adding that this posed environmental risks as these yards were not being controlled.

"The authorities don't really regulate these yards, they don't have the resources," he said, adding Eurometrec tried to get the police to deal with the problem.

In the Nordic region Eurometrec has told all their member scrap yards not to pay for scrap in cash.

"In Sweden you cannot go to anyone and expect to get cash for the scrap," he said.

Instead money had to be transferred to an official bank account that could easily be traced to the owner.

BIR is the umbrella agency of the international recycling industry which generates over $150 billion in turnover each year and handles over 600 million tonnes of raw material a year.

(Reporting by Anna Stablum, editing by Peter Blackburn)

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