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Non-ferrous update: brighter market on the horizon

An upbeat survey of European traders suggests a better year for the industry than some observers had been expecting in late 2022.

The year started with something of a surprise. The Association of German Metal Dealers and Recyclers (VDM) conducted a survey of European dealers on the situation in the secondary metal industry. The result was pleasing: the VDM business climate index may have fallen slightly again but the change was significantly smaller compared to 2022.

Most companies now view the economic situation as rather positive, meaning the business position of most metal recycling companies could well improve in the next three months.

However, the developments of the past few years show that even a slight gust can be enough to make the business climate worse again and there remain plenty of economic, political and geopolitical risks. All the same, the non-ferrous industry in Europe is entering the new year with confidence.

According to those surveyed, the supply 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.

A total of 15% expect a better supply while more than two-thirds (71%) expect a constant supply of scrap metal. Only 14% of the metal traders anticipate a shortage. Prices for most non-ferrous metals at the LME have picked up in recent weeks, correlating to lower stocks.

Shipping blues

Freight specialist Loadster reported in mid-January that shipping groups had cancelled 53 westbound sailings from Asia to Europe in the first seven weeks of the year, amounting 27% of their original scheduled capacity.

‘Preliminary statistics from Container Trade Statistics for November reveal cargo volumes from Asia to Europe fell 18.4% after a slump of 25.9% in October but there are suggestions that the data for December could turn out to be much worse,’ it said.

One of the alliances, Maersk was quoted as saying it expected a normalisation in stock levels, economic outlook and consumer habits but added ‘it is uncertain exactly when this will occur’. Meanwhile, freight rates continue to be well below the record levels seen during the height of the pandemic.

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