Page 78 from: Recycling International July issue | 2021 + TOP 100!

market analysis

strong raw material
demand sustains markets
Record-high prices for metals – and particularly

copper – ease as stocks grow but recovering

economies boost trader confidence.

Germany at the end of June showed
that around 60% of commercial enter-
prises do not expect the raw material
shortage to ease this year.

RUSSIAN DUTIES
Russia raised eyebrows by saying it
would introduce export duties on fer-
rous and non-ferrous metals from 1
August until the end of the year in a
bid to protect the domestic market
from higher raw material prices. The
official cabinet press service reported:
‘Duties will comprise the base rate
(15%) and the specific component.
The value of the latter will be comput-
ed depending on the kind of metal
(for non-ferrous metals) or the conver-
sion degree of products (for ferrous
metals), subject to global price
dynamics as of the end of five months
of 2021.’
The charge will be at least US$ 1 226
per tonne for copper, US$ 2 321 per
tonne for nickel, and US$ 254 per

78

The shine has come off copper slightly
after a month in which its three-month
price fell from over US$ 10 200 per
tonne on 1 June to US$ 9 374.50 per
tonne on the final day. After a period in
which copper and iron prices reached
record highs – copper was US$ 10 500
per tonne in mid-May – several reasons
have contributed to the decline. None,
however, undermines the general opti-
mism around the red metal because of
the anticipated worldwide growth in
electric vehicles and the metal’s key role
in their production.
In the US, copper prices fell after the
Federal Reserve brought forward its

expectations for raising interest rates.
More broadly, downward pressure on
prices followed China’s decision to
release industrial metals from its
national reserves to curb surging com-
modity prices. Concern over commod-
ity price rises was first expressed by
Chinese officials in May at a meeting
with the biggest iron ore, steel, cop-
per and aluminium producers.
Then the National Food and Strategic
Reserves Administration said it intend-
ed to sell 20 000 tonnes of copper, 30
000 tonnes of zinc and 50 000 tonnes
of aluminium in early July. Reuters
reported these totals accounted for
only 2.3% of China’s copper output in
May and 4.4% of imports of
unwrought copper in the same month.
Another challenge for traders has
been worries about sending cargoes
to Chinese ports implementing tough-
er quality controls on imports off sec-

ondary materials. Anecdotal reports
suggest they are diverting cargoes
elsewhere in Asia and to Europe at
discounted rates just in case.

STRONG YEAR
Looking back, the US Bureau of
Labour Statistics reported that all
scrap commodities were up for the 12
months ending May 2021. According
to the Producer Price Indexes, copper
base scrap led the way rising 89.6%
over the period. Metal markets in
Europe have remained buoyant in
recent weeks even though higher pric-
es are likely to be behind us for the
time being.
The highest non-ferrous prices were
on the LME in May after which they
fell back in some cases and have since
moved sideways. High prices some-
times bring noticeable additional
costs in retail not because the margin
changes but that the costs of bridging
loans or credit insurance increase.
Lead reached a new year-to-date high
of US$ 2 340 per tonne on 30 June.
The European economy is in a curious
situation. Despite coronavirus, indus-
try is booming in many areas, such as
in construction, transport or mechani-
cal engineering, all of which need raw
materials. While the supply situation
was generally good in the first quarter
of 2021, there were supply bottle-
necks from April, which in turn result-
ed in sharply rising prices.
Industrial metals were always avail-
able, not least because of the well-
functioning trading and recycling
structure in Europe, but rising raw
material prices also had an impact. In
addition, there were reports of logis-
tics problems and concerns that metal
could become scarcer in the second
half of 2021. A survey carried out in

MIlESTONE fOR ChINESE RECYClER:
120 bIllION AlUMINIUM CANS pROCESSED
Novelis is to supply Nissan with sustainable, lightweight aluminium body sheet for the all-
new Qashqai SUV and create a closed-loop recycling system within Europe. By using alu-
minium, the Qashqai has achieved 21kg weight savings compared to the previous model.
Novelis will deliver aluminium material from its plant in Nachterstedt, Germany to Nissan’s
car plant in Sunderland UK, where it will then collect the manufacturing scrap and return it
to its recycling centres in Europe to be cast and rolled again for production by Nissan.
Novelis also announced that its Yeongju Recycling Center in China has processed 120 bil-
lion aluminium cans since opening in 2012. The Yeongju plant is the largest of its kind in
Asia, with capacity to annually recycle nearly 300 000 tonnes of aluminium. The process
from cans being collected in recycling bins to being restocked on store shelves is about 60
days. Meanwhile, work on China’s first closed-loop automotive aluminium recycling facility
in Zhenjiang is due to start next year. Still in China, the national Nonferrous Metals Industry
Association expects carbon emissions from the sector to peak after 2025 as it switches
increasingly to recycled aluminium. Deputy secretary general Yang Yunbo, quoted by
Reuters, said emissions from the non-ferrous sector would peak at around 750 million
tonnes, 90 million tonnes higher than 2020. The aluminium industry accounts for more than
83% of the emissions from China’s non-ferrous metal industry and are expected to peak at
600 million tonnes, an increase of 50 million on 2020.

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