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Germany

Germany, the third-largest economy globally, is facing ongoing challenges that are expected to extend beyond 2023. Experts foresee Germany as a laggard, with the economy struggling to recover from a current recession and exhibiting only marginal growth rates. Current forecasts indicate a slow and challenging revival of the German economy. The Economic Barometer of the German Institute for Economic Research (DIW) declined for a third consecutive month in November and now stands at 85.3 points, nearly three points below its October level.

In an effort to boost investment in the rail infrastructure, the German government has approved the expansion of the truck toll on federal roads and highways. A new law, effective from December 1, introduces an additional CO2 surcharge on the usage fee. Furthermore, starting July 1 2024, the toll obligation will extend to smaller transporters weighing over 3.5 tons as compared to the previous threshold of 7.5 tons. This legislative move is expected to affect collection of scrap from smaller suppliers, exacerbating the scarcity of material. The recent energy crisis had already increased costs for smaller merchants and the extended truck toll measures are expected to deepen the impact on collections.

It is generally reported that scrap availability in Germany is down as much as 40%, depending on the region. With the year-end approaching, December is expected to witness minimal activity in the scrap metal sector as some family-owned businesses defer new sales until the new year.

In the aluminium market, there has been a prolonged increase in official prices of 226 alloy over recent weeks. Positive sentiment, coupled with international demand, has driven up block prices. The strong contango in both the copper and aluminium markets has captured attention, prompting questions about the sustainability of this high contango in the future.