ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(75)628
Vol.1975/0237

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COMMISSION OFTHEEUE.OPEANCOMMUMHBS
COM(75)628 final.
Brussels,9December1975
MEMORANDUM
FROMTHE_COMMISSION TOTHE_R; OFTHEGOVERNMENTS
OFTinMEMBERSTATS:"rgINCOUNCIL,CONCEPNING
theferrousscrapmarketsituationintheCommunityand.the
measures --toliberalizetheexportofferrousscrapto
non-membercountriesfortheperiod1stJanuary-30thJune1976«
C0Î'(75)628final.

-- 111/1-33/75*E
MEMORANDUM
FROM THE COMMISSION TOTHEREPRESENTATIVES OF .THEGOVERNMENTS
OFTHEMEMBER STATES MEETING INCOUNCIL ,CONCERNING
theferrous scrap market situation intheCommunity and the
measures toliberalize the export offerrous scrap to
st _ _ ■thnon-member countries for theperiod 1 January -30 June 1976 .
Thesituation onthe Community scrap market in1975
The first factor which hasinfluenced theCommunity scrap market in 1'-'
has clearly been theunfavourable development ofsteel production .
Activity intheSteel industry decreased by18,7# during thefirst 10
months of1975 ..According tothe estimates pftheForward Programme Steel
*fchforthe kquarter 1975 ,steel production forthewhole year could declias
byabout 20#incomparison with 197^.
Thedevelopment oftheproduction ofsteel byprocess forthefirst
seven months of1975 comparison with thesame period of197^wasas
fellows
Bessemer Open Hearth Electric Oxygen Total •
-44,5# -23,5# -0# (1) -13,9% -15,4#
These rates ofdecrease must beexamined inrelation tothe changes in
production potential -byprocess between 1974 and1975 which isshown
below (according tothe1975 enquiry ): ..*,
Bessemer Open Hearth Electric Oxygen Total u
-15# -10# . ' ,+11# ..+12# +6,9#
•Theresults ofthis comparison are that Bessemer production hasbeen
-proportionally the .most -affected bythereduction inactivity in;the stecl
industry whilst theelectric steel process hasbeen better -,able toadapt
itself tothefirst phase ofthereduction indemand forsteel products .
(10incl.uding independent steel foundries .

XII/1133/75
rd .. .Inthe 3quarter thefall insteel production reached 728# in
rdcomparison with the3quarter #f .197-4 andhasaffected inequal measure
ththe -electric steel process ..Inthe4quarter ,following theestimates
oftheForward Programme *thereduction intheproduction ofcrude steel |
could be -23,6$ . , !
Thesecond factor which hasplayed animportant role ontheCommunity
scrap market ,has *been thechanges occurring inthespecific consumption
ofscrap inthesteelmaking plants equipped with convertors . ;
Inprevious periods ofrecession inthesteel industry theabove steel j
plants have shown atendency towards growth ,ift".ispecificiconsumpt ioneof ,-> I
scrap when itsprice falls below themarginal cost ofliquid pigiron . ;
Onthis occasion »despite amarginal cost ofpigiron around 30#
above theprice ofscrap ,therestrictions imposed bythelong-term ,contracts
forthedelivery ofiron oreand coke have made itcompletely impossible
toincrease theinputs ofscrap .Infact thespecific consumption of
theoxygen steelmaking plants was forthefirst half-year of1975 around
236Kg/tincomparison with 246Kg/tin1974 and254Kg/tin1973 * j
Theoverall specific consumption fortheyear 1975 will bearound j
^32Kg/tascompared with 427in1974 because ofthechanges instructure j
ofproduction byprocess .
Thesupply anddemand balance isincluded inAnnex II.This balance I
shows the {significant reduction inthe -activity ofthedealers in1975
(-19# )andallows aninterpretation ofthedevelopment oftheCommunity
scrap market .
Itisnecessary however todistinguish twodistinct periods . j
Infact during thefirst six .months thedeterioration ofthesituation
hasbeen contained bytheless unfavourable development oftheelectric
steelworks ;asmall improvement has .even been inevidence .inApril and .
May . . '
Bycontrast ,since thebeginning ofthesummer thelarger reductions
insteel production coupled with thelowlevel ofspecific consumption in i
the -steelworks using convertors hasresulted inasignificant fall inthe
' '
demand forscrap .

III/1133/75
-5-
Thequantities delivered andprices which fell inOctober-November 1975
tothelevel ofJanuary-February 1973 (atcurrent prices )have asaresult
been heavily reduced .
Attheabove level ofprices thecomplete coverage ofthecosts of
collection andpreparation would appear problematical notably inthecase
oflight capital scrap . .... , . - -
II.Exports tothird countries
Licences granted andquotas available
D F BNL TJK
.etquarter 1975
Licences granted
Quota available
Coverage
2Rdquarter 1975
Licences granted
Quota available
Coverage
3r<*"quart ér '1975
Licences granted
Quota available
CoverageDN
46820 23971 34290
480004800038000
'98% 50# 90^
'448304330160860
1000008066080000'
■45# 54# 76#
■■■3&3^ :^33941 -39319'
80000 ■''80000 • '90000
45# 42# '44#14777
15000
99/o
53504
60000 .
89%90?(VTotal
22385 142693
25000174OOO
82#
30000350000
8000030000360000
Itappears from theexamination ofthetable that ,despite "theincrease
insize ,of .thequotas granted ,theexports ofscrap tothird countries have
not truly contributed tothemaintenance ofasatisfactory level ofactivity
for the dealers .
TheCommission has foreseen this development since thespring and it
rdmotivated their proposal forthe3quarter 1975 submitted tothe
representatives oftheGovernments oftheMember States onthe19^June •■
1975 (document COM(75)299 final ).

111/1133/75
III .Intra-Comraunity Trade - .•
Thetable below shows thedevelopment ofthree most important flows
,ofintra-community trade ,i.e. theFrench andGerman deliveries toItaly *
and the'Dutch deliveries toGermany .-
I I .
in000 tons
Year 1974 2753 208 1 1031
Monthly Average ,.229 173 •'86 '- '
1st"Half "Year 1975 " 1262 840I
'442 \
Monthly Average 210"" 140 74 !
, !
July 1975 149 ' 109"56–, |
August 1975 60 87 ',44: .• |
September 1975 (248 ) 135 68
First 9month 1975 1719 1171 •'610
Monthly Average 191 ■;130'■58"'"T.;-;"' ;
%reduction ofmonthly
averages 1975/1974 -16,6 -24,9 f32,6
_ t
The contraction inthe .course ofthefirst nine months ofthe •;
exchanges anditsaccentuation towards theendoftheperiod reflects rather
well the -development ofthemarket .
Bycontrast theexchanges between theUnited Kingdom andoriginal
member countries oftheCommunity have increased
>British deliveries toother ECSC countries
.r- i'• 1000 tonnes
D UEBL F I 'NL rDK !IRL ,>
1974(1 ) ' • , ' ' '•' ' '• .
(year ) > 61 40 25 4? 3 . - 22
1975 '·· ,'. «.■.·:
<8months ) 163 81 '22 120 84 ; n.d .
(1)according totheimport statistics .

111/1133/75
-5-
IV.Prospects for the end ofthe year 1975 and the beginning of1976
Theestimates foractivity inthesteel industry fortheendofyear
1975 andfirst quarter of1976 indicate astagnation atthelevel ofthe
months september-october 1975 *
Theestimated balance forthefirst quarter of1976 (Annex II)has
been established onthe basis ofthe continuation ofthis trend .
However within this stagnation alight improvement forlong products
produced bytheelectric process could occur intheweeks tocome and even
assert itself during thefirst months of1976 .This factor could contribut
toanimprovement inthesituation onthescrap market during thefirst
half of1976 ;this market dould again becharacterized byadivergence
indevelopment inrelation tothemarket forsteel products comparable
tothat witnessed during thefirst half 6f1975 *
stItshould benoted that the 31 December 1975 marks the end of
transitional period when quantitative restrictions were permitted inthe
exchanges ofscrap between theKingdom ofDenmark and theother member
countries .This integration will take place without particular problems .
V.Measures tobetaken
Theprospects sketched under point IVallows theconclusion that
thesupply oftheCommunity steel industry will besatisfactorily assured
during thefirst months of1976 . ,
For this reason theCommission proposes totherepresentatives of
theGovernments oftheMember States meeting inCouncil toagree for the
st _ __thperiod 1January 30 June 1976 aquota forexports ofecr&p to
third countries ofthe order of500.000 tonnes for thewhole Community .
Such atonnage lies bfelow thatn-' agreed foi^ther second half year of1975
(700.000 tonnes )buthere theweak coverage ofthequotas since the
second quarter of1975 should fegain berecalled .Inrespect of ,export
qualities nochange should bemade totheregime adopted for1975
(essentially lowqualities with good qualities forming around 15$
ofthe total )•
•••/••

111/1133/75
Ο
6Three other decisions will expire on "the "'31 December 1975 :
-thedecision oftheIQ^*1July 1973relating tothetempory export ofscrat
th-thedecision ofthe10 July 1975 relating tothetempory import ofscraj
-thedecision ofthe 10 July ,1975 relating totheexport ofrolling
mill rolls . -
' !/.
These three decisions should berenewed for thewhole year 197& .
stFurther ,twoother decisions will also expire onthe 31 December 1975 :
th-thedecision ofthe 10 July 1975 relating tothe export ofalloy steel
scrap • ' '
th _" '-thedecision ofthe 10 July 1975 giving anadditional quarterly quota
:totheKingdom ofDenmark of20000tonnes ofscrap ofallqualities .
These last twodecisions should berenewed forthefirst half year of1976 .

Ai:icxI
.Scrapironprices
Scrapmetalpricesforthe03categoryofthenewclassification ofscrapmetalsintheCommunity,
exworks,taxfreeCompo-site "price
jrmany'Belgium .France "Italy G« Netherlands !United
{Kingdomendofmonth
HMSNo
Month
Im/tB/tFFr/tFrenchscrap
delivered Modano
FFr/tGermanscrap
delivered
Basle
DM/tItalian
scrapex
works
ItoLire/t Iï Dfl/t£/t g/t
1973~
January
July
December
1974'
January
April
July
December
1973
January
February
March--••
April
May
.June
July
August
September
October
November
December127
154
1962100
2Ô00
3200210
285
315'270
360
44o152
200
24529000
53000
63000135
185
227.550.33•
54.17
77.03
211
572(1)
256
>59
237
187
157
167
167
165
170)
170)
170)3700
5400
if000
3500
■3^50
2500
■2-200
2700
3100
2500
!
i
\–
j2*+50
;2300
i I
l I370
505
510
415
395
340
280
305
335
315
290
290
290
270
i510
780
630
540
460
340
340
480
390
370
340
340
!.3^0
;320
i285
I
I275
390
310
300
245
160
.160
240
200
190
170
170
170
160
14572000
100000
90000
75000
72000
52000
52000
67000
63000
60000
'50000
50000
52000
47000
45000c
t
t
i
(
(
(237.5
425 20
270 27
290 31
255î28
180-24
155
175..
200-19
200 22
.180 22
175 20
170 20
160
15092.50
111..:
125.17'
86.50
76.33
78.50
84.50
84.83
77.17
59.0
i58.17
76.83
68.00
58.50
;50.50(19.11
!
(1)SinceAprilCategory0ofthenewGermanclassification

Supplies and .requirements ofscrap IntheCommunity
(»000000tons )AnsexII
r-
Dempnd
Consumption in ^steelworks
Consumption inblast furnaces
Consumption in;rolling mills ,
Variations instocks
Exports
TOTAL
Resources
Recuperation iniron andsteelworksNetinternal purchases
Imports
TOTAL
Ce)=estimation1974
Year Monthly Average
66.5
1.8
0.5
+0.'9
0.6
70.3
31.8
36.9
1.:6
70.3
Cf)aforecast,,5*54
.0.15
0.04
0.08
0.05
5.86
2.65
3.08
O.13
5.861975 (e) 1976(f )
Year Monthly Average 1eQuarter
54.0
"Î.4
0.5
+.0.4
0.8
57.1
25.6
30.0
1.5
57.14.50
O.12
0.04
0.03
O.07
4.76
2.13
2.50
O.13
4.7613.1
0.4
0.1±0
0.2
13.8
6.2'
7.3
0.3
13.8