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Middle East

The situation in the Red Sea has had several impacts on trading in the Middle East, notably delays and disruption to the transportation of scrap metals to and from the region. There has also been an increase in transportation costs through higher insurance premiums, security-related expenses and additional costs associated with rerouting vessels or implementing alternative transportation methods. These increased costs are being passed on to traders and consumers, leading to higher prices for non-ferrous scrap and impacting the competitiveness of industries relying on these materials.

The Middle East relies on efficient supply chains to import and export non-ferrous scrap. Events in the Red Sea have disrupted these supply chains, leading to shortages of scrap in certain markets and affecting the availability of raw materials for manufacturing and construction industries in the region.

Uncertainty surrounding the situation in the Red Sea contributes to market volatility and fluctuations in commodity prices. Traders may adopt a cautious approach, leading to a reduction in trading volumes and investment in the non-ferrous scrap market. This volatility can create challenges for businesses in managing inventory, forecasting demand and planning future trade activities.

The disruption can have broader implications for economies in the Middle East, particularly Gulf Cooperation Council countries which rely heavily on maritime trade for their non-ferrous scrap imports and exports. Such supply chain issues impact various sectors of their economies, including manufacturing, construction and recycling.

Means of addressing these challenges could include enhancing maritime security measures, diversifying trade routes and investing in alternative transportation infrastructure to ensure the continued flow of non-ferrous scrap into and out of the region.

Rami Shahrour

SHARMETAL TRADING CO. S.A.R.L. (LBN), Board Member of the BIR Non-Ferrous Metals Division


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