Despite rising coverage across Eastern Europe, there is still an obvious difference in COVID vaccination rates between EU and non-EU countries with 31.6% in Russia and 14.7% in Ukraine comparing to 49.6% in Poland, 55.5% in the Czech Republic and 62% in Hungary, according to Reuters.
Since Russia’s August 1 implementation of export tariffs on a number of non-ferrous grades, exporters have had to go the extra mile to adjust to the situation, with the first few weeks of August proving to be a painful transition period. Some were forced to use alternative routes or to change the products being exported (for example, wire rod instead of cathode). Export volumes dropped significantly for copper items, as well as for stainless scrap and ferrous grades, although brass and aluminium were less affected.
However, it has been announced that the tariff system will be cancelled as of January next year, to be replaced by a system of severance taxes and complex income taxes, although this has yet to be signed officially into law.
With metal prices hitting new heights, the markets have been very buoyant. Copper is in very high demand across the region and the lack of available scrap is pushing up prices.
Centre-stage has been taken by the aluminium sector, however. The life of an aluminium trader is anything but easy these days given the semiconductor and silicon shortage, as well as difficulties in sourcing scrap. Indeed, the semiconductor crisis continues to deepen, with vehicle manufacturers being forced either to produce semiconductor-free cars for stock while awaiting further supplies or to scale back or even stop production for a period, like Opel at Eisenach in Germany.
The silicon shortage is another major issue: incredible price growth in September saw some offers as high as US$ 11,000 per ton on the back of strong demand.
Aluminium alloy manufacturers have reported trying to lock in the volumes for their silicon requirements for six months or even a year as opposed to normal quarterly purchasing. Most important is the question as to whether the supplier will actually perform on the contract.
Market participants are also noting unusual activity among Chinese consumers trying to buy silicon in Europe. The biggest Chinese silicon producers are reporting that additional volumes will not be available until the first quarter of 2022.
With all these struggles, aluminium alloy producers are forecasting a decline in physical demand for ingots in the fourth quarter; indeed, some have already reported reductions in output of between 5% and 15%.