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Nordic Countries

Cold weather and snow, as well as a decline in non-ferrous materials and a big drop in ferrous inflows, are adversely affecting the mood among most scrap yard operators. There appears to be no real pressure and even the usual rush to clear yards before the Christmas holidays seems to be missing. Price ranges can really vary but, even so, buying prices do not appear to match what sellers are seeking.

Couple this with higher transportation costs for trucks and the emerging attitude seems to be one of wait-and-see and of hoping things will get better despite expectations of a long and slow winter. The recycling business is not alone in expressing concerns for the future; this is also being seen on the production side where fewer orders are coming in and some are even being cancelled.

As for economic developments, Denmark, Finland and Norway have exhibited greater resilience compared to Sweden where GDP has been on a downward trajectory since the conclusion of last year. Both Sweden and Norway will continue to experience inflationary impulses owing to their weak currencies.

In Denmark, GDP has been buoyed by the return of householder confidence and by inflation dipping below 1%, which is expected to provide an additional boost to real incomes. The Finnish economy experienced a significant deceleration in the third quarter, as indicated by the latest GDP figures from the country’s statistical office. The manufacturing sector has demonstrated notable resilience and industrial production is now in the process of mounting a recovery. However, the level of new orders is precarious and this is raising doubts about the sustainability of this positive trend.

Sweden’s Riksbank has concluded its tightening phase, leaving the interest rate unchanged at the November meeting; attention is now turning to the possibility of a first rate cut. Regarding the Swedish krona, it is possible that the Riksbank’s foreign exchange reserve hedging, involving krona purchases primarily from October 2023 to January-March 2024, might receive additional support if more Swedish financial market participants opt for buying krona. However, there is a risk of a significantly weaker krona in the event of a hard landing, which could partly explain the currency’s current lack of appreciation.