MSTC Ltd. plans to install India’s first auto shredder

The state-run scrap metal trading firm MSTC Ltd., headquartered in Kolkata, India, has signed an agreement with Mumbai, India-based Mahindra Intertrade, a part of the Mahindra Group, to set up an auto shredding and recycling plant in India.

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According to an online report by The Hindu newspaper, the joint venture seeks to help meet India’s annual ferrous scrap requirement of 5 million to 6 million tonnes, much of which is imported. Mahindra estimates imported ferrous scrap’s value at $1.8 billion.

B. B. Singh, chairman and managing director with MSTC, is quoted in The Hindu as saying, “India’s demand for vehicles stood at 23.34 million in 2015. It brings to the fore the issue relating to scrapping of end-of-life vehicles (ELVs), and when you consider all these points, this joint venture has immense potential for further growth.”

The joint venture is starting with a single installation but also is looking at a Pan-India presence, he adds.

According to India Infoline News Service, Gujarat and Maharashtra are two locations being considered for the auto shredding and recycling facility.

The facility, reportedly the first of its kind in India, will have automotive recycling capabilities, including collection, compaction, transportation, depollution, dismantling, shredding, recycling and disposal, says Sumit Issar, Mahindra Intertrade’s managing director.

“Its capacity will be about 1 to 1.5 lakh tonnes (100,000 to 150,000 tonnes), depending on the product mix,” Issar says. “It will begin commercial production by March 2018.”

Earlier this summer, several Indian states, including Chhattisgarh, Bihar, Kerala and Delhi, had proposed or enacted bans on older vehicles with the goal of cutting down on air pollution in their regions. Such bans can help to create feedstock for the shredder.

According to Raipur, India-based SteelMint Group, the bans are on vehicles (including buses, trucks and auto rickshaws) older than 10 years or 12 years, depending on the state.

LME makes fee and transfer rule changes

The London Metal Exchange (LME) has introduced a set of measures it says are designed “to optimise its market structure, strengthen its role as the global liquidity centre for metals trading and facilitate enhanced trading opportunities for members and their clients.”

A new “rebalanced” fee rate is being introduced for short-dated carries (including “tomorrow/next” trades) executed by members effective 1 September 2016.

Short-dated carry trades enable users to roll positions from day to day, which the LME calls “a vital component of inventory management for industrial users.”

The LME has concluded that a 44% fee reduction on member short-dated carries should be implemented, bringing the cost down to match the client fee of 50 cents per side (trading and clearing inclusive). This fee is lower than the approximately 58 cents charged prior to the LME’s fee changes in 2015.

The LME also says it will limit the charges for member and client position transfers, which will enable users to migrate large open positions “in order to manage portfolios as efficiently as possible.” The average cost for such large position transfers in 2015 was approximately $30,000. Such charges will now be capped at $10,000 per transfer, the LME says.

Additionally, LME Clear has designed and will implement a new margining methodology designed to reduce the initial margin payable for LME positions. The LME, which is owned by Hong Kong Clearing and Exchanges (HKEX), says the new methodology will continue to provide “best-in-class risk management and market stability.” The new approach, which remains subject to final regulatory approval, is expected to significantly reduce initial margin, in particular for aluminium and copper, and to lower the all-in cost of LME trading for members and their customers, the exchange says.

“The LME remains the cornerstone of HKEX’s global commodity strategy,” says HKEX Chief Executive Charles Li. “In addition to these market structure changes, we will continue to expand the LME’s presence in Asia, especially China, through enhancing connectivity with China’s commodities market, continuing to push for LME-certified warehouses in China and launching a physical platform in Shenzhen, China. We are making good progress on these initiatives.”

The LME says its membership “provided an invaluable forum for the discussion of new initiatives and business opportunities.”

Derichebourg to acquire Bartin Recycling

Derichebourg, a global environmental services firm based in Paris, has announced plans to acquire Bartin Recycling from Veolia Environmental Services, which also is headquartered in Paris. Derichebourg says it will fund the acquisition using its existing credit lines. The transaction will be completed after obtaining approval from French competition authorities.

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Veolia Environmental Services acquired Bartin Recycling in 2007. At that time Bartin Recycling was the third-largest metals recycling firm in France. Bartin operates about 20 sites in France, recovering obsolete scrap metal, new production scrap, demolition material and other metals. In total the company recovers and processes about 450,000 tonnes of scrap metal each year.

Veolia’s end-of-life material (aircraft, ships, rail rolling stock and industrial facilities) dismantling and deconstruction business is not involved in the sale.

Abderaman El Aoufir, deputy chief executive officer of Derichebourg, says, “This acquisition is part of a long-term industrial strategy. It will enable the Derichebourg group to expand its regional coverage in France and ensure supply to its recycling units with volume from these recently acquired sites. The transaction completed with Veolia allows for the integration of external skills that will enhance our industrial and commercial processes.”

Pascal Tissot, president of Bartin Recycling, says, “I am delighted to have been able to finalise Bartin Recycling’s acquisition by a major metals recycling business like Derichebourg. It brings the assurance of a solid industrial project and real growth prospects for its subsidiary and the protection of jobs that Veolia was keen to ensure for its 300 employees.”