The recent resignation of Boris Johnson has sparked an increasingly bitter battle between Liz Truss and Rishi Sunak to become the UK’s next Prime Minister. Both were major figures in Mr Johnson’s Cabinet but are now distancing themselves from him as they set out their own policy platforms. The winner will be announced when Parliament returns from the summer recess on September 5.
The holiday season is here and, as happens every year, supply to merchants is beginning to slow down. The deceleration started a few weeks earlier than usual when UK inflation rose to a 40-year high of 9.4% in the year to June 2022, according to the latest figures from the Office for National Statistics. This has heaped added pressure on household finances that were already stretched to breaking point as UK domestic consumers grapple with the worst cost-of-living crisis in years. With householders tightening their belts, they are ordering fewer new cars and washing machines, etc. The result is that existing models are kept running rather than being scrapped, thus ultimately affecting supply.
UK merchants are also having to contend with exponentially rising diesel costs and continuing staff shortages. Traders are reporting that supply from merchants is satisfactory but that there is plenty of competition out there, and so they are having to keep their prices keen.
Consumer demand for non-ferrous metals continues to be reasonably robust, especially now that LME prices seem a little more settled. Those consumers who were reluctant to quote owing to price volatility are now back in the market.
Merchants and traders are expecting slower demand from Continental European consumers during August owing to summer shutdowns. They are reporting that sales are still being made but with extended delivery dates. Demand from China has been hampered by the country’s zero-COVID policy and the resulting whole or partial city lockdowns.
As we head seemingly towards a global recession, it is feared that climbing interest rates will bring challenges for the metals trade, especially for those with high gearing. Terms of credit are already being extended, which will ultimately lead to a credit squeeze.
The British Metals Recycling Association has recently launched a safety awareness campaign highlighting the fire risk from incorrect disposal of lithium-ion batteries. Lately, there has been a significant rise in the number of fires at metal recycling sites owing to concealed lithium-ion batteries which, when punctured, damaged or exposed to high temperatures or moisture, may spontaneously combust and set fire to anything flammable around them. So, lithium-ion batteries need to be disposed of separately, not co-mingled with other products. This not only reduces the risk of fires but also allows for the recovery of valuable natural resources - in this case, lithium. So it’s a win-win if everyone recycles responsibly.