Posted on: Friday, May 13, 2005
Stealing feeds China's need for steel
By Peter McGill
Bloomberg News Service
At Belgium's biggest railway station, 770 of 800 steel luggage carts have vanished. In Pittsburgh, 400 parking meters were plucked from roadsides, and in Shanghai, manhole covers are disappearing from the streets.
From London to Kolkata, India, scavengers are plundering anything that contains iron, steel or copper, costing local governments and companies millions of dollars. Prices in the $85 billion global scrap market have tripled since 2003 as China has sucked in recycled metal from around the world.
"There is an almost insatiable global demand for scrap, mainly to feed China's steel mills and its booming economy," says Rick Wilcox, director general of the British Metals Recycling Association in Brampton, England.
China's gross domestic product grew 9.5 percent in 2004, the fastest among the world's biggest economies, increasing demand for metal to build office towers, cars and appliances. China this year will buy almost a third of the world's steel and account for 80 percent of the growth in demand, according to the International Iron & Steel Institute, a trade group for steelmakers.
The price of heavy scrap steel in Britain nearly tripled to $265 a metric ton in December from March 2003, according to Worcester Park, England-based Metal Bulletin Plc, which publishes prices and news on metals markets.
Prices soared as China doubled scrap imports in the past five years to 10 million tons, representing one-fifth of the total seaborne market for the material, says Tony Trickett, general manager for raw materials at the Brussels-based steel institute.
Europe's attempts to cut carbon dioxide emissions are also increasing demand for scrap, which requires less energy to process than ore. Companies such as Luxembourg-based Arcelor SA, the world's second-biggest steelmaker, are melting scrap in electric-arc furnaces rather than smelting iron ore, says Trickett.
"Scrap is very much worthwhile for people to steal," he says.
Stolen metal finds its way to the legitimate businesses when thieves sell scrap to small junkyards that don't check the origin of the material before they sell it to wholesalers, says Francis Veys, director of the Brussels-based Bureau of International Recycling. The bureau represents companies in 55 countries.
"It's falling through the chain," Veys says.
In 1994, Bruxelles Midi, the Brussels terminal for high-speed trains to London, Paris and Amsterdam, bought 800 luggage carts for about $644 each. Now there are only 30 left, forcing travelers to shoulder their baggage, says Anne Woygnet, a spokeswoman for the Belgian state railways. Each cart contains 88 pounds of steel.
"We think it's the value of the metal," Woygnet says. "We hire private security guards for the station. They came across a gang loading some of them onto the back of a truck without any number plates, but the guards didn't have authority to make arrests."
In the east London borough of Newham, 260 drainage grates and 42 manhole covers have been stolen since October.
Steel production in China almost tripled in the past five years as consumers bought more cars and refrigerators and the country built stadiums, subways and roads to prepare for the 2008 Olympics in Beijing.
In Shanghai, home to Baoshan Iron & Steel Co., which supplies half the steel used by China's carmakers, theft of manhole covers is epidemic. More than 4,740 have been purloined since the beginning of last year, including 99 this month. At least eight people have died after falling into uncovered sewers, according to the government's Xinhua News Agency.
Subrata Mukherjee, mayor of Kolkata, formerly known as Calcutta, says drug addicts in India's second-largest city steal about 1,000 manhole covers a year.
As a deterrent, Kolkata Municipal Corp. started using concrete covers. Thieves now crack open the concrete to steal the iron reinforcing rods.
