Russia’s invasion of Ukraine and Covid infections cloud future prospects of strong secondary material markets.
Few commodity markets have been unmarked by the consequences of Russia’s invasion of Ukraine and the subsequent weeks of disruption to production and trade. Non-ferrous metals have been no exception, while other influencing factors include China’s trade policy and the continuing coronavirus pandemic.
Since the last market report in mid-February, prices for non-ferrous metals have risen again. The price level, which has been high for weeks, continues to weigh on the market because the financing costs of metal trading have also risen sharply as a result and trade credit insurance is more difficult and expensive.
US trade data for the first two months of 2022, reported by ISRI, showed US exports of recycled copper and copper alloys to China rose 18.8% year-on-year to nearly 156 000 tonnes. The value of these exports also climbed, up 52% on the same period in 2021. Copper scrap exports to China jumped 77% during the first two months of 2022 to nearly 52 000 tonnes. Other market gains by weight in January and February included Thailand (up 136%), India (+84%), Japan (+61%), Belgium (+61%), and Hong Kong (+134%).
Meanwhile US imports of recycled aluminium declined 10% year-on-year during the first two months to less than 93 000 tonnes. More specifically, imports of industrial aluminium scrap rose 24% but this was more than offset by a 28% drop in other recycled aluminium imports.
Long-term contracted ocean freight rates recovered after significant falls at the turn of the year. The Xeneta Shipping Index (XSI) for March, which is based on data from leading global shippers, rose 7.0% month-on-month. European imports on the XSI rose by 7.7% in March, representing an all-time high. Year-on-year, the benchmark is up by 87.1%, and it is 7.5% higher than in December 2021.
US imports on the XSI rose by 6.9% in March, an increase more than offsetting the decline reported in February. The index is now 99.3% higher than the equivalent period of 2021 and has risen by 8.9% since the end of last year. In a positive sign for US shippers, average waiting times at Los Angeles and Long Beach improved after carriers decided to shift some operations to US east coast ports.
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