The current economic landscape presents a dichotomy: on the one hand, domestic economic momentum has gradually gained traction amid a resurgence in real wages and a sustained positive trajectory in investment; on the other, international demand prospects have dimmed further amid the lingering fragility of global economic conditions.
Within the industrial sector, a notable contraction in production has once again manifested itself, signalling a distinct downturn. This bifurcation in economic dynamics underscores the intricate interplay between internal and external factors, necessitating a nuanced approach to navigate the complexities of the prevailing economic environment. Strategic foresight and adaptability are paramount as businesses contend with the divergent forces shaping the economic narrative.
In recent times, there has been a substantial decline in the availability of scrap, attributed to a confluence of factors. Diminished industrial production, as previously outlined, has played a significant role in this downturn. Simultaneously, the construction sector has contributed to the scarcity by generating less demolition scrap - a consequence of reduced building activity stemming from heightened interest rates.
Compounding this challenge, the prevailing energy crisis has prompted a widespread reduction in smelting capacities. While this has resulted in a certain equilibrium, it is crucial to acknowledge that such a delicate balance is far from optimal for the industry’s health.
Notably, alloys that can no longer be produced within European borders are finding outlets in the international market. Prices of aluminium ingots experienced a steady decline throughout September, culminating in a state of stagnation as October commenced. The recent volatility in copper prices, with a steep ascent followed by a pronounced fall in early October, has induced a state of shock within the recycling industry. Many mid-sized enterprises, lacking the capacity for effective hedging, find themselves in a state of anticipation, awaiting a potential recovery in prices. This underscores the imperative for resilience and strategic planning within the recycling sector in these challenging times.
It remains critically important that all national associations collaborate with the European Recycling Industries’ Confederation (EuRIC) and BIR to actively address the impending challenges regarding the Waste Shipment Regulation. With the European elections next year, it becomes imperative for our industry to engage with policy-makers, emphasizing that our sector is reliant on international markets. By proactively approaching politicians, we can underscore the significance of fostering an environment that supports and facilitates the global interconnectedness crucial for our industry’s sustained vitality.