Page 49 from: Recycling International January/February issue 2023
NON-FERROUS
Brighter market on the
horizon
According to those surveyed, the sup-
ply of scrap had improved slightly with
a quarter rating it as good. Only 29%
of companies thought it worse than
the previous quarter while 46% see
their supply situation as balanced.
Metal traders’ expectations in the
next three months are again better
than in the final quarter of 2022: 15%
expect a better supply while more
than two-thirds (71%) expect a con-
stant supply of scrap metal. Only 14%
of the metal traders anticipate a short-
age. Prices for most non-ferrous met-
als at the LME have picked up in
recent weeks, correlating to lower
stocks.
EXPORT BAN
At a time when free trade and protec-
tionism are constant themes for recy-
clers, the news that Indonesia is to
ban bauxite exports from June will
interest those buying and selling sec-
ondary aluminium. The country is the
world’s sixth-largest bauxite producer
and has the fifth-largest reserves,
according to the US Geological
Survey. It is the third-biggest supplier
to China.
Additionally, according to Asean
Briefing, the export of other unpro-
cessed minerals such as copper and
tin will also be stopped, although no
dates have been set out. According
to Reuters, President Joko Widodo
says the bauxite ban will replicate
his country’s success in developing
its nickel processing capacity after
halting ore exports in January 2020.
That enticed foreign investors,
mostly from China, to build local
smelters.
That measure also led to a dispute at
the World Trade Organization.
Following a complaint by the
European Union, WTO ruled in
November that the ban on ore
exports, as well as a requirement that
nickel had to be processed domesti-
cally prior to export, violated WTO
rules. In mid-December, a senior
Indonesian official told Bloomberg his
government, which is appealing, had
no plans to resume nickel ore exports
and wanted to impose an export tax
on semi-processed nickel.
49recyclinginternational.com | January/February | 2023
CHINA AND COVID
China’s decision to withdraw its zero-
Covid policies is reported locally to be
affecting delivery services and logis-
tics. Any impact on domestically gen-
erated scrap will be important for
Chinese copper producers as this is
only weeks after the biggest opera-
tors committed themselves to make
recycled copper a quarter of total pro-
duction by 2025. Less available
domestic scrap will mean smelters
competing for overseas material.
For 2022, the World Bank says GDP
growth in China will have been 2.7%,
well below the 5.5% expected last
March. GDP growth for 2023 is fore-
cast at 4.3%. According to StoneX,
‘targeted policy action within mone-
tary, fiscal, social, industrial and tech-
nological sectors will underpin the
country’s pro-growth strategy’.
On a brighter note for the Chinese
economy, domestic car makers pro-
duced 27.02 million units in 2022, up
by 3.4% year on year, while sales rose
by 2.1% to 26.86 million units, accord-
ing to the China Association of
Automobile Manufacturers. EV output
in China was 7.1 million units in 2022,
an increase of 96.9% year-on-year,
while vehicle sales rose 93.4%.
BUSINESS NEWS
The Supervisory Board of Aurubis AG
has approved an investment package
of around EUR 530 million to double
the processing capacity of the Aurubis
Richmond recycling plant in Georgia,
USA, increased recycling capabilities
in Hamburg, and expansion of a solar
park at Pirdop its site in Bulgaria.
The company says: ‘Recycling contin-
ues to boom in the USA, growing by 5
% every year, resulting in a rapid
increase in the availability of complex
recycling materials. These are very
attractive conditions for the faster
expansion of Aurubis’ market position
in the United States.’
Major non-ferrous producers such as
Aurubis and Boliden are increasingly
promoting ‘greener’ products and find-
ing customers are willing to pay extra
FIASCO FINDINGS
The London Metal Exchange has pledged to say by the end of March how it
intends to prevent any repetition of the fiasco that hit nickel prices last year
and resulted in a temporary trading shutdown.
Worries about supplies from Russia after it invaded Ukraine and bets on
lower nickel prices saw prices double within hours on 8 March 2022 to more
than US$ 100 000 a tonne.
Management consultants Oliver Wyman was asked to identify the factors
that contributed to the wild conditions and to provide LME with recommen-
dations how it could reduce the likelihood of similar events re-occurring.
Factors identified included the existence of large, exposed, short positions,
the withdrawal of liquidity and price acceleration and resultant margin calls.
It notes that LME’s controls did not manage price volatility during the
events.
In response, LME Group chief executive Matthew Chamberlain told Reuters:
‘It’s a good and fair report, it clearly identifies things that we need to
improve.’ LME itself added in a press release: ‘LME Group is committed to
taking all the necessary steps to rebuild the confidence of the metals mar-
ket. As such, the LME Group will prepare an implementation plan, setting
out how it proposes to deliver against the recommendations in Oliver
Wyman’s report, which it will aim to publish to the market by the end of Q1
2023.’
The review did not cover decision-making processes and governance
arrangements which will be assessed in separate inquiries by The Bank of
England and the UK’s Financial Conduct Authority. LME also faces legal
action by some of the parties affected by the incidents last March.
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