What were global non-ferrous metal market trends in Q2CY'24? How will Q3 look like? BIR report

The Bureau of International Recycling (BIR) released its report till July 2024 quarter, detailing significant challenges and transformations in the global non-ferrous metals industry. China's production of recycled aluminium reached 9.5 million tonnes (mnt) in 2023. By the end of the year, the use of clean energy for electrolytic aluminium had increased to 24.4%. In India, there is a gradual ramp-up underway for Adani's copper refinery. When fully operational, this will change India's copper trade dynamics while insights from South Africa and the US highlight a brighter economic outlook following the recent election and early signs of an economic slowdown.

Country-wise analysis

• China
  
  

Ma Hongchang, a regional recycling expert in China, regularly provides updates to the BIR on policy and regulatory developments. According to his latest report, China's production of recycled aluminium reached 9.5 mnt in 2023. By the end of the year, the use of clean energy for electrolytic aluminum had increased to 24.4%. Additionally, exports of aluminium and aluminium products totalled 8.09 mnt in 2023.

Shen Dong, a board member of the BIR Non-Ferrous Metals Division from OmniSource Corporation in the US, provides insights into the Chinese market. He noted that there has been strong growth in the production of new energy vehicles, and auto sales were higher in May. Additionally, proposed revisions to regulations could impact China's imports of recycled raw materials.

Also during May, auto sales increased 4.3% m-o-m to 1.936 million units but production was 1.4% lower at 2.372 million units. Meanwhile, aluminium and zinc inventories both increased in Shanghai's bonded warehouses. China's domestic magnesium production has remained unchanged despite the typical summer slowdown.

• India
  
  

Anirudha Agrawal, a board member of the BIR Non-Ferrous Metals Division from Manaksia Aluminium Co. Ltd. in India, provides insights into the Indian market. Moody's projects that India's economic growth will reach 6.6% this fiscal year. However, increased shipping costs are driving up aluminium scrap prices in the country.

Additionally, there is a gradual ramp-up underway for Adani's copper refinery. When fully operational, this will change India's copper trade dynamics. Yet, with falling treatment/refining charges and Indonesia's willingness to ban the export of copper concentrates, challenges remain for India's newest refiner.

• South Africa
  
  

Sidney Lazarus, a board member of the BIR Non-Ferrous Metals Division from Non-Ferrous Metal Works (ZAF) Pty Ltd in South Africa, provides insights into the market. He highlights a brighter economic outlook following the recent election, with load shedding suspended for over 100 days. Additionally, inflation is expected to decline in the coming months, contributing to a more favourable business environment.

The ban on copper scrap exports is still in effect; however, dealers continue to export copper ingots, blocks, and billets, with the possibility of a future duty being imposed. Exports of brass scraps like honey and nomad are also ongoing. Although aluminum scrap can still be exported through the International Trade Administration Commission, most dealers are opting to sell locally, except for one or two grades that are not consumed domestically and must be exported.

• New Zealand
  
  

Paul Coyte, President of the BIR Non-Ferrous Metals Division and a representative from Hayes Metals in New Zealand, provides insights into the Australasian market. He noted that the market sentiment is more subdued this year, with activity being quieter compared to the same period last year.

Additionally, both New Zealand and Australia have opted to leave their official cash rates unchanged, reflecting a cautious approach to economic conditions in the region.

• Germany
  
  

Sebastien Perron, a board member of the BIR Non-Ferrous Metals Division from Wiedland-Werke AG in Germany, shares insights into the Canadian market.

He reported that non-ferrous metal flows in Canada were down by 10-20% in the first quarter. However, volumes have been boosted by seasonal factors and higher copper prices. Despite this, lower demand for copper is causing inventory turnover to slow.

• Middle east
  
  

Rami Shahrour, a board member of the BIR Non-Ferrous Metals Division from Sharmetal Trading Co. S.A.R.L. in Lebanon, provides insights into the Middle Eastern market. He noted that political instability continues to disrupt the region, with the Red Sea crisis affecting logistics and increasing costs. Meanwhile, Saudi Arabia is making progress toward its ambitious Vision 2030 and Vision 2040 goals.

• Pakistan
  
  

Aamir Malik, a board member of the BIR Non-Ferrous Metals Division from A.B.M. Corporation in Pakistan, shares insights into the Pakistani market. He observed that the non-ferrous metals industry is flourishing due to growing interest in recycling. There is consistent demand for copper, and the localisation of the auto industry is having a positive impact on the market.

• South East Asia
  
  

Stella Ying Wang, a board member of the BIR Non-Ferrous Metals Division from American Iron & Metal LP in Canada, provides insights into the Southeast Asian market. She reported that stringent Chinese inspections of Malaysian Certificates of Origin have considerably slowed the pace of Malaysian aluminium ingot exports to China. Containers are being held for inspection at Malaysian ports for over three months, causing significant delays.

• The US
  
  

Rick Dobkin, a board member of the BIR Non-Ferrous Metals Division from Shapiro Metals in the US, offers insights into the United States market. He noted early signs of an economic slowdown, with typical reductions in automotive consumption. Additionally, there is currently a shortage of mill-grade scrap in the industry.

• Benelux
  
  

Jurgen Van Gorp, a board member of the BIR Non-Ferrous Metals Division from Aurubis AG in Belgium, provides insights into the Benelux market. He observed that there is not much surplus volume currently visible. The upcoming weeks are anticipated to be slow and quiet in the market. Additionally, it is noteworthy that the Belgian government is set to become a shareholder in Umicore.

• Eastern Europe- Poland
  
  

Natallia Zholud, General Delegate and Board Member of the BIR Non-Ferrous Metals Division from TRM Group in Poland, provides insights into the Eastern European market. She noted a slowdown in business activity, which has led to reduced availability of scrap. Sales of weaker brass and copper to Asia are also reported, while Russia's secondary aluminium producers are facing challenges in finding outlets for their products.

• The UK- Germany
  
  

Murat Bayram, a board member of the BIR Non-Ferrous Metals Division from European Metal Recycling Limited in the UK, provides insights into the German market. He highlights a continued decline in industry orders and noted that the metal market is slowing down amid the summer break. Additionally, logistical challenges in German ports are impacting operations in the non-ferrous metals sector.

• Italy
  
  

Leopoldo Clemente, a board member of the BIR Non-Ferrous Metals Division from LCD Trading S.R.L in Italy, provides insights into the market. He reported that industrial production exceeded forecasts in May, indicating positive growth trends. There has been a reduction in hostilities regarding electric car imports, which could potentially benefit the market. Additionally, consumption data for June shows improvement, reflecting positive momentum in the sector.

• Spain
  
  

Jose-Martin Neumann, a board member of the BIR Non-Ferrous Metals Division from TSR Recycling GmbH & Co. KG in Germany, provides insights into the Portuguese and Spanish markets. He noted that many dealers sold out their inventory during the period of higher LME copper prices. The Portuguese economy is projected to grow by 2% this year, while Spain's GDP is expected to increase by 2.4% in 2024.

• Mexico
  
  

Alejandro Jaramillo, Vice-President of the BIR Non-Ferrous Metals Division from Glorem SC in Mexico, offers insights into the market. He mentioned that Mexico has elected its first female president, highlighting a notable development in leadership. There are also ongoing business concerns regarding the concentration of power within the official party. Furthermore, the auto industry is experiencing a prosperous year, contributing positively to the market dynamics.