According to the statistics, the German economy expanded by 2.7% in 2021. For 2022, the outlook is positive and unemployment rates are dropping. We would see even higher growth rates if the semiconductor problems were resolved. The conflict in Ukraine is a dark cloud for us all, creating uncertainty within the whole economy.
LME prices are rising and scrap not sold in the fourth quarter of 2021 was sold instead in the early weeks of January. After this first wave of scrap sales, the industry is reporting low availability and less “fresh scrap” arriving in the yards. Supply is very slow on copper and high-grade aluminium.
The copper market once again reached US$ 10,000 per tonne and the demand for copper products appears very healthy. Copper cathode premiums are rising and copper scrap discounts are being influenced by higher Chinese demand. Looking to primary aluminium, billet premiums are rising and leading to better terms on high-grade aluminium scrap. The secondary aluminium market is positive too and we have seen six weeks of step-by-step increases in 226 ingot prices. Silicon-related qualities have been in particular demand over recent weeks.
Logistics costs for scrap deliveries in Europe look set to rise further amid a shortage of truck drivers and higher diesel prices. In addition, shipping companies have had to postpone a lot of containers owing to a shortage of capacity.