n° 166 – May 2020

The UK has recorded the highest number of COVID-19 deaths in Europe - in excess of 33,000 at the time of writing. The country has been in lockdown since March 23 and the restrictions are just beginning to be relaxed, albeit slowly, with the government publishing a 50-page, step-by-step plan on how it intends to ease the lockdown.

Metals recyclers have been allowed to continue working throughout the lockdown period owing to their classification as an essential service. However, it is estimated that overall volumes are down 75% owing to some companies closing and to an inability to operate within social-distancing guidelines, thus leaving businesses unable to ensure the safety of both their own staff and suppliers. Of those that have remained open, the majority are not operating full-time and are, for example, working only three-day weeks.

As 70% of the UK’s scrap metal is exported, new challenges in logistics are also being faced when shipping to countries at different stages of lockdown. A number of merchants also fear that some export deals will be reneged upon once the destination port is reached, as happened in 2008.

UK companies, like others around the globe, are having to monitor cash-flow carefully. To see them through this period of financial uncertainty, many companies and foundries are taking advantage of the UK’s furlough scheme whereby the government pays 80% of an employee’s previous wages up to £2500 per month. When this scheme ends, it is predicted businesses will still need job cuts - but hopefully not as many - in order to make them viable and sustainable.

Non-ferrous sales are at an interesting point. While some copper consumers seem to have tried to widen their margins, supply-side constraints are making this a very difficult trick to pull off. Traders report good demand for copper, but no supply; essentially, if you can buy copper, you can sell it.

Aluminium is an entirely different proposition. Largely as a result of the current malaise in the automotive sector, many UK and European consumers are either closed or are working to a hugely-reduced production schedule. Both price and demand are pretty much at historic lows. The overall situation in the automotive sector suggests the road back for aluminium will be very long. 

Lead mills are mostly closed but there are signs of them reopening as orders for new lead sheet are coming in from the construction industry, which has been allowed to continue operating during the lockdown.

While every country has experienced a massive drop in volumes, it is reassuring to see that those ahead of the UK in this nightmare are starting to see a glimmer of light at the end of the COVID-19 tunnel. It will be a long haul for the UK, across all areas of industry, but as usual the resilient UK recycling sector is leading from the front, and trade - albeit slowly - is beginning again.

Susie Burrage - Susie Burrage (United Kingdom)

Susie Burrage

Recycled Products Ltd (GBR), Board Member of the BIR Non-Ferrous Metals Division

United Kingdom
n° 166 – May 2020