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Nordic Countries

It’s not only outside that’s dark here in the north right now; economic sentiment is also not very bright, with even gloomier times and recession predicted. The Nordic economies have so far shown great resilience but, with a predicted cold winter ahead and the negative effects from depressed real household incomes, rising mortgage rates and a weaker housing market in all the Nordic countries, things are changing fast.

The recession among the other Nordic nations is expected to be milder than for Sweden, which is facing record-high electricity prices and a core rate at 2.5% - the highest in 14 years. For Norway, high energy and petroleum prices have been good, having earned the Norwegian oil fund (pension fund) such a large income that the Norge Bank needs to sell a lot of Norwegian krone, rendering the currency weak. While the Danish economy is not expected to expand in 2023, it is well equipped to cope with stresses as households have large savings and the government has a substantial budget surplus.

A cold and snowy winter will affect scrap yards but, so far, it’s business as usual. Even though there is less scrap coming into yards, the decrease is from very high levels. On the positive side, there is still demand for scrap material, maritime freight rates have fallen significantly and some bottleneck problems have generally eased. So far, the market has not been as bad as forecasted, although many scrap dealers are expressing caution owing to the uncertainties ahead, including among others rising inflation, energy shortages and the continuing effects of the Ukraine conflict.