South East Asia
As outlined in the previous Mirror report, South East Asia’s economies looked poised to continue their recovery from the chaos caused by the pandemic over the past two years. Economists were optimistic about the Asia-Pacific region, predicting an upward trajectory this year. The region took the Omicron variant in its stride, with most economies learning to live with COVID and opening up their borders. There were still concerns over the rising costs of energy and of other key commodities that were making everyday goods such as petrol and diesel more expensive. But on the whole, sentiment remained positive.
However, so much has changed within the past month with the Russia/Ukraine conflict as problems such as rising inflation, supply chain bottlenecks and concerns over a global recession became magnified overnight.
Still fragile as a result of Malaysia’s newly-imposed import requirements, the region’s scrap processors are dealing with a host of other factors affecting demand. China, the largest consumer of this region’s processed scrap, is experiencing its biggest spike in COVID infections since the initial outbreak over two years ago. This recent surge in numbers has caused massive delays at China’s main container ports; this has led many container vessels to be re-routed to other sea ports in, for example, Singapore, Malaysia, Indonesia and the Philippines, resulting in further congestion at these ports.
Adding in the global rise in inflation, further lockdowns and labour shortages owing to the lingering pandemic, all these factors will make for a very challenging year filled with many uncertainties.