Metal markets have been strong in both Australia and New Zealand, with good demand from domestic consumers. The challenge has been shipping to traditional offshore markets given that securing containers and vessel allocations has been a huge problem. There have been several reports of scrap metal dealers loading containers but then having to unload them and return them to the shipping line because their booking slots have been cancelled.
In late January, New Zealand posted its highest inflation figure in 30 years at 5.9%. Coupled with the first confirmed cases of Omicron in the community and the resulting restrictions, this means that the economy will come under more strain. The Reserve Bank of New Zealand is widely anticipated to increase interest rates; it is now a question of by how much and how often this is deemed to be necessary to bring inflation under control.
Australia’s inflation rate, meanwhile, is at 3.5% - its highest in eight years. The concern here too is that this will lead to an increase in interest rates.
Overall, metal merchant and metal consumer sentiment remains positive in both Australia and New Zealand. Scrap is flowing into yards in good volumes and the general consensus is that commodity prices will remain strong going forward.