South East Asia
With the current lockdowns in the key port cities of Shanghai and Shenzhen, global supply chain pressures and inflationary concerns resulting in part from China’s zero-COVID policy have greatly impacted South East Asia.
As commented in the previous Mirror, South East Asian economies have been looking to continue their recovery from the mayhem caused by the pandemic over the last two years. Economists were optimistic about the Asia-Pacific region, predicting that its recovery was poised to remain on an upward trajectory this year. The region took the Omicron outbreak in its stride, with most economies learning to live with COVID and opening up their borders. There were still concerns over the increases in energy and other key commodity prices that were making everyday goods such as petrol and diesel more expensive. But on the whole, sentiment remained positive.
However, so much has changed with the Ukraine conflict. Problems such as bottlenecks in the supply chain, rising inflation and concerns over a global recession magnified overnight. Even without the Ukraine crisis unsettling global commodity markets, South East Asia had been feeling pressure.
The much-discussed scrap metal import requirements imposed by Malaysia appear to have been handled by the region’s consumers as bids for most grades of copper-bearing scrap - such as shredder pickings (Shelmo) and non-ferrous heavies (Zebra) - are still in demand. China, which is the region’s largest consumer of its processed scrap, is experiencing its biggest spike in COVID infections since the initial outbreak over two years ago. The region has seemingly dealt with the massive congestion at the main container ports of Singapore, Malaysia, Indonesia and the Philippines, with customs clearance much quicker and easier than first expected.
Despite the global rise in inflation, further regional COVID lockdowns and the latest decline in the terminal metal markets, the region’s scrap industry has shown strong resilience and is poised to remain an important market.