The third quarter is ending with increasing market volatility and more uncertainty surrounding COVID-19. The LME has been gaining more ground and stability over the past month, with copper reaching US$ 6800 per tonne - a 50% jump since March when the pandemic forced economic activities to slow. There has been optimism within the markets as other metals have followed the red metal’s strong momentum. A recent strengthening of the US dollar in relation to other currencies pushed copper prices down to around US$ 6400 per tonne before a return to a trading range of US$ 6500-6800. The slide was not too steep given that virus infections are rising globally and that demand for scrap metals has slowed.
The number of COVID cases has surged again over recent weeks in the Middle East as all economies have reopened in a bid to revive and boost business. Most countries in the region have reopened their airports and borders: having shut them in March, Saudi Arabia reopened its airports on September 15 whereas Oman will wait until October 1 before opening up its airports and borders again. In early September, schools and universities resumed in many countries but distance learning remains the dominant and new norm.
The region’s non-ferrous market volumes picked up in the third quarter, with more material being offered and supplied. This was mostly driven by steadier and stronger LME prices. However, there has been a significant drop in demand from buyers owing to higher stocks and slowing production resulting from ongoing COVID-19 uncertainties across global markets.
Ibrahim Aboura
Aboura Metals (ARE), Board Member of the BIR Non-Ferrous Metals Division
Country
Middle East
