BIR Q3 2024 report: Global non-ferrous market faces mixed trends ahead

The Bureau of International Recycling (BIR) has published its report for the third quarter of the calendar year 2024 (Q3CY'24), along with a forecast for Q4CY'24, detailing developments in the global non-ferrous market.

India

Anirudha Agrawal of Manaksia Aluminium highlighted India's robust economic growth despite global challenges, supported by factors such as strong monsoon rains, increased public infrastructure spending, and rising household investments in real estate. The World Bank has revised India's growth forecast for FY 2025 to 7%, up from 6.6%. Foreign exchange reserves reached a record US$ 670.1 billion in August, while both the manufacturing and services sectors showed strong performance, with the services PMI hitting 60.9. However, longer inward transit times due to the Red Sea crisis and the current elevated levels of the Shanghai Freight Index have impacted Indian consumers, though recent cooling has offered some relief.

LME aluminium prices fluctuated, while ADC12 imports from the Middle East have continued, and exports to China have slowed. Domestic stainless steel and zinc scrap prices have improved, with good availability and competitive pricing in the zinc market. Copper and brass scrap prices remain aligned, with satisfactory margins for Indian recyclers, though exports to China have decreased.

China

Ma Hongchang, a Chinese recycling expert, shared that the yield of major types of recycled non-ferrous metals has steadily increased in China. In the first half of 2024, China's recycled non-ferrous metal output reached 9.6 million tonnes (mnt), up 8.8% y-o-y, with recycled copper at 2.25 mnt (+10.3%), aluminium at 5.2 mnt (+11.8%), lead at 1.5 mnt (+1.4%), and zinc stable at 650,000 tonnes (t). Imports of recycled copper, brass, and aluminium raw materials also grew, with copper imports at 1.151 mnt (+18.33%) and aluminium at 948,700 t (+15.63%). Local governments are increasingly promoting the industry, while new project approvals fell 33% y-o-y, particularly for lead (-79%) and copper (-72%). Renewable resource logistics increased 11.1% y-o-y.

Shen Dong from OmniSource Corporation highlighted that China's vehicle production and sales in August 2.492 million and 2.453 million units, respectively were down y-o-y, but a positive trend is expected due to the regional vehicle replacement subsidy policy. A new joint venture between China Minmetals Corp. and Qinghai Salt Lake Industrial, with US$ 1.4 billion in capital, aims to produce 30,000 t of lithium carbonate and hydroxide, along with batteries and related materials. Additionally, China has introduced a US$ 325 billion stimulus plan, reduced interest rates, and increased funding to boost the property and stock markets.

Australasia

Paul Coyte of Hayes Metals, the President of the BIR Non-Ferrous Metals Division, noted the recent destocking by Australasian metal merchants in response to higher LME levels, though overall tonnages remain low and short-term forecasts suggest little improvement. While New Zealand's Reserve Bank is expected to cut interest rates further in October, they remain higher than Australia's. With New Zealand's manufacturing index at 45.8 in August, cost reductions are needed to boost consumer spending. The property market in New Zealand appears to have bottomed out, while some Australian states are seeing strong growth. Competition and margin pressure persist across the metals market, emphasising the need for value-adding and strategic positioning.

Yoko Yoshida from Metal Solution Provider reported that Shigeru Ishiba's appointment as Japan's new prime minister has had minimal impact. In the metals market, a shortage of copper concentrate has increased scrap consumption, while brass production levels have seen a slight rise compared to last year. However, domestic demand for aluminium scrap is anticipated to be low in the coming months, creating more opportunities for exports.

Mexico

Alejandro Jaramillo of Glorem SC, the Vice-President of the BIR Non-Ferrous Metals Division, noted a 39.7% drop in new employee registrations in Mexico from January to September 2024, the lowest since 2020. Informal labour remains significant, complicating job data. On a positive note, Mexico's automotive industry saw growth in production (+6.1%), export sales (+7%), and internal sales (+10.5%) during the same period, bolstering the economy. Despite this, scrap purchasing in the auto sector has been lower than expected, though demand may rise as premiums for primary aluminium increase. The future of the US-Mexico relationship remains uncertain, with USMCA trade agreement frictions likely depending on the outcome of the US presidential election.

Pakistan

Aamir Malik of ABM Corporation highlighted the growth of Pakistan's scrap recycling industry, now the country's fourth-largest export sector, with China as the main trading partner. Recent government reforms aim to streamline activities and boost recycling volumes and tax revenues. However, a new policy in June sharply increased taxes on exporters and recyclers, raising concerns about their ability to compete regionally. Copper and aluminium continued to see strong domestic and international demand, especially in exports to China. Meanwhile, the revision of the EU's Waste Shipment Regulation poses a major challenge for the industry in 2025, causing instability and prompting calls for government action.

Malaysia

Stella Ying of Wang American Iron and Metal LP noted that in the first half of 2024, Malaysia intensified inspections of imports, particularly from the US, to prevent the illegal entry of electronic waste, following its commitment to stricter environmental standards. This led shipping companies to report potential compliance issues in advance to avoid delays at Port Klang. Meanwhile, Malaysia has also tightened regulations on aluminium ash disposal, prompting smelters to seek local partnerships. Since the introduction of SIRIM standards in 2021, Malaysia's aluminium scrap imports have dropped significantly, with a 16.6% y-o-y decrease in early 2024. In contrast, Thailand has benefited from this regulatory shift, increasing its aluminium scrap imports and positioning itself as a key player in the regional trade landscape.

United States

Rick Dobkin from Shapiro Metals shared that the Federal Reserve's interest rate cut by 0.5%, the first in over four years, eased inflation concerns but raised worries about labour markets. Housing remains strong, but auto sales are slowing, and consumer confidence is at a three-year low. In recycling, new greenfield aluminium expansions have caused sporadic shortages, and export markets for secondary aluminium are weakening, though domestic demand is stable. Copper demand remains strong with wider spreads, while brass ingot-maker orders have slowed. Recent port strikes have been suspended following a tentative deal.

Eastern Europe

Natallia Zholud of TRM Group reported a significant drop in metal volumes in August, with some seeing reductions of up to 40%, far worse than a typical holiday slowdown. The recent rise in LME copper prices and stronger demand from Asia have improved the red metal's situation, but suppliers are expected to remain cautious in future contracts. Meanwhile, the Eurozone's manufacturing PMI dropped to 45.0 in September, the lowest in nine months, prompting potential policy easing by the European Central Bank. Increased purchasing from Asia also boosted Russian exports, aided by a weaker rouble.

United Kingdom

Gareth Hyams from APM Metals LTD revealed that the UK economy has been stagnant for months, with flat GDP and slowdowns in construction and manufacturing dampening trade. Businesses are sceptical as the government prepares its first budget, hoping for positive changes. Merchants reported steady material movement over the summer, though prices were lower than in spring, forcing tighter margins due to shortages. LME prices rebounded in late September, boosting confidence.