World Mirror on Non-Ferrous Metals – Issue March 2023: Metals prices impacted as confidence takes a knock
A concise summary of the BIR World Mirror on Non-Ferrous Metals – Issue March 2023. Full version with detailed market reports available in the Members Only section of the BIR website.
Trading controversies and banking industry turbulence have combined to undermine confidence across the metals marketplace, according to the latest World Mirror on Non-Ferrous Metals from the BIR global recycling organization. Against the backdrop of a systematic fraud heavily impacting Trafigura, the emergency rescue of Credit Suisse and other trading/banking shocks, the commodity markets have proved once again that uncertainty is far from being their friend.
Recent developments in the banking sector have triggered fears across financial markets of a contagion effect. Nervousness is also more palpable in the commodity markets as consumer sentiment is turning more conservative and prices of many metals have been negatively affected.
Feedback from Europe suggests lower LME values have impaired flows of metal into yards. Regular clients in the UK are said to be delivering less tonnage or appearing less frequently. Higher workforce, power, fuel and raw material costs have led to a slowdown in activity and to the postponement or cancellation of projects that would otherwise have generated metal. From Germany, it is said that the combination of reduced demand for house construction, falling aluminium ingot prices and increasing discounts for copper is reinforcing an already low availability of metals. And for the Nordic Countries, the markets remain disappointingly quiet and slow, increasingly so because of recent colder weather and late snow.
Demand at US aluminium mills has not improved since the end of last year, with many still sitting on the sidelines and not buying much prompt scrap. Secondary scrap aluminium prices have been rising in the USA as export demand has been strong, while healthy domestic and export orders are reported for copper grades.
South into Mexico, the recovery in vehicle production is translating into more consistent demand for scrap grades used to produce secondary aluminium, resulting in resilient to bullish pricing for these grades over recent weeks. Meanwhile, UBC prices are said to be low enough to be attractive to smelters producing secondary aluminium.
On the wider economic front, a modest 5% GDP growth target was set for 2023 in China during the National People’s Congress annual meeting in early March. The Reserve Bank of India, meanwhile, has forecast that its country’s real GDP will climb a little under 7% this year despite some signs of slowing demand in key sectors, such as automotive. Also, high levels of price volatility have curbed India’s import volumes of copper/copper alloy scrap. Across in Japan, the No. 1 copper scrap market has become oversupplied owing to lower demand from rolling mills while competition to secure aluminium has become severe, partly driven by the strategy among consumers to increase the scrap share of their raw material portfolios.
In some parts of the world, the aforementioned market disturbances have been matched in the early part of the year by the turbulence of weather conditions. In New Zealand, for example, cyclones and flooding brought significant infrastructure damage but reportedly had no major impact on consumer or merchant yards. However, access to some areas was cut off.
With contributions from its members, BIR publishes periodical commodity reports under the label "BIR World Mirror". These detailed reports exist for Non-Ferrous Metals, Ferrous, Stainless Steel / Alloys, Paper, Plastics and Latin America and provide BIR members with up-to-date information on the respective commodity or market segment.
The report on Non-Ferrous Metals appears once every two months, whereas Ferrous, Stainless Steel, Paper and Plastics are published quarterly. Latin America is covered twice per year.