Since the previous Mirror, many countries within South East Asia have begun easing travel restrictions, allowing many essential businesses to reopen. However, this gradual reopening has been hindered by the absence of co-ordinated and cohesive regulations addressing restrictions placed on reopened borders and on foreign labourers. For example, Malaysia is prohibiting foreign entry until August 31, with very few exceptions, while Vietnam’s borders will remain closed to all foreign nationals until further notice. The obstacles to workers travelling freely between neighbouring countries within the region are hindering production capacity increases and wider growth.
In South East Asian countries with a strong local labour force, scrap processing businesses are operating at high production levels, fuelled by demand for copper-bearing scrap such as insulated copper wire and shredded electric motors and secondary aluminium grades like Zorba.
The majority of these copper and aluminium units are destined for the Chinese market. Even before the COVID-19 pandemic, China was South East Asia’s primary and largest trading partner and its main source of foreign investment. The recovery of the South East Asian market has been closely tied to China’s resurgence in the second quarter of 2020 when its GDP growth rebounded to 3.2% after suffering a 6.8% decline in the first quarter of this year when its focus was on combatting COVID-19. China’s economic recovery gained more momentum in June as exports and services were the direct beneficiaries of supportive government policies. The gradual and limited reopening of overseas markets is providing an environment for the slow resumption of trade flows.
Indeed, South East Asia’s economic recovery will be largely dependent on the speed of the rebound among the major economies of China, the EU and the USA. While a full economic recovery is still in the distance for China, all the indications are that it has a solid head start on the rest of the world.
Liberty Iron & Metal, Inc. (USA), Board Member of the BIR Non-Ferrous Metals Division