As many countries move into a new phase of their response to the coronavirus pandemic, scrap demand is picking up, concludes the BIR world recycling organisation in its latest global market update.
China, Hong Kong and Taiwan are slowly returning to normal; COVID-19 cases in China have been declining sharply over the past month while no new cases have been reported in Taiwan for two weeks. Customers have also begun purchasing normally, with non-ferrous metals volumes appearing to climb 20-30% compared to the previous week.
The buying mood is being greatly impacted by the prospect of China’s reclassification of ‘recycled material’ which is scheduled to come into effect for brass, copper and cast aluminium alloys on July 1.
In the global ferrous scrap sector too, businesses are slowly returning to work and demand is picking up; the main issue at present surrounds banking in India, with delays reported in getting Letters of Credit opened.
From Greece, greater normality is emerging in the e-scrap sector as suppliers gradually re-start their businesses and improve the sourcing of raw materials. Exports – for example, to India – have begun to regain some of their previous impetus.
Uncertainty rules in plastics sector
Within Europe’s plastics recycling industry, there remains a feeling of uncertainty. Prices are still low owing to the oil price slump and huge stocks are overhanging the market.
However, there are some glimmers of hope: companies are being allowed to restart production with the cancelling of some lockdown restrictions, and demand is slowly increasing. Among those to restart is the car industry, a major consumer of recycled raw materials.
European plastics recyclers obviously have little idea themselves how supply – and thus the entire pricing structure – will develop in the coming weeks. In China, factories are resuming production and, as a positive sign, prices of polypropylene and styrenics have increased over the last two weeks.
Most export-orientated rubber clients in India resumed operations a couple of weeks ago and are now ordering as much as before the outbreak of COVID-19. On the supply side in Europe, there are emerging issues with securing enough material as several months with far fewer cars and trucks on the road have served to reduce the availability of end-of-life tyre materials.
Paper collection rates down
As regards paper recycling, 77% of plants in France are now open and 3% are opening on appointment. Out of 18,000 employees, 10.5% are operating from home, 25% are working part-time and 7% are not working.
Looking to the wider picture, collections in France are down by: 20% for paper and cardboard, 37% for industrial waste, 82% for construction waste, 24% for plastics, 48% for wood and 75% for metals. Total turnover was down year on year by 39% in March and by 64% in April.
Across in the UK, Prime Minister Boris Johnson announced some changes to lockdown measures on May 10. Much debate and confusion have been created by the government’s decision to introduce a two-week quarantine period for people arriving at UK airports, except for those coming from the Republic of Ireland and France.
Meanwhile, the country’s engineering and automotive sectors should begin their return over the coming days.
Low textiles demand
The textiles recycling sector is still experiencing very low demand from many end markets and for all qualities, although some markets in Eastern Europe are now showing the first signs of improvement. Furthermore, some graders have restarted production or have announced that they will be doing so within the coming days, albeit at reduced volumes. Collections of used textiles in Western Europe remain below normal levels but are also increasing.
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