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Nordic Countries

Activity levels continued to head downwards during the second quarter and most yards saw lower inflows of material, with volumes declining as much as 50% for some. High spot prices for some items - such as aluminium rims, copper cable and motors - added to a messy market situation. Overall, there are plenty of mixed feelings out there right now, with some yards struggling to make ends meet while others feel this is a time of opportunity.

In Sweden, meanwhile, the environmental authorities are now classifying ordinary mixed cable scrap as hazardous waste if it cannot be proved the plastic is harm-free. The impression is that this is only the first of many materials for which tougher classifications will be seen.

Given these conditions, the summer shutdowns and holidays have come at a timely moment to give everyone a chance to relax and recharge.

Key developments in the Nordic region include Turkey’s approval of Sweden’s NATO membership following promises of support in EU membership negotiations and collaboration in counter-terrorism efforts. This announcement led to a strengthening of the Swedish krona against the Euro; however, the driving force behind this currency movement remains somewhat unclear, with most of the moderate change occurring prior to the news becoming public. While NATO membership is unlikely to be a decisive factor for the Swedish krona, it may lead to increased exports to Turkey.

Finland’s economic outlook is weak for the rest of the year. Household spending is under pressure and exports are slowing, but the increase in electricity output and the strong labour market will support the economy. Inflation in Denmark decreased to 2.5% in June, driven primarily by the reversal of high energy prices. In Norway, core inflation unexpectedly reached a record level of 7%, with rising food prices being a significant contributor to the one-percentage-point acceleration in the CPI-ATE measure over the past few months. 

Returning to Sweden, concerns about inflation within the Riksbank central bank have increased significantly following the higher-than-expected rate recorded in May. The potential impact on inflation of the long period of krona weakness is also raising concerns.