Entering the autumn months in Scandinavia, the non-ferrous scrap business is slowly settling into a “new normal”.
Although most non-ferrous metals have regained their pre-COVID positions on the LME, underlying demand for scrap in Europe is still lower than before the beginning of the crisis. A disconnect seems to have emerged between stock prices and the real world as non-ferrous traders are facing increasing returning charges and postponed delivery times on a daily basis. For now, it is difficult to see what could change this picture.
During the summer, the virus was at a relatively low level in Scandinavia. However, it now seems to be spreading once again and, as a result, countries in the region are facing increasing restrictions. As in the rest of the world, Scandinavian economies were hit hard by lockdowns in the spring; now, countries are trying to find methods to fight the virus without causing more economic damage than is necessary.
In Denmark, private consumption is the main driver of economic recovery following the COVID outbreak. Interest rates are very low and even negative in some cases, and real estate prices are increasing. Since Danes were unable to go abroad for their summer holidays this year, and probably won’t next year, demand for summer houses in Denmark has increased dramatically. Danish GDP is expected to slip around 4.5% in 2020.
In Sweden, house prices are at record highs and unemployment is expected to decline during the second half of 2020. It is anticipated that the Swedish economy will return to pre-COVID levels by mid-2021, with GDP thought likely to drop around 3.5% in 2020.
In Norway, many people chose “staycations” this summer over travelling away for their holidays; as a result, private demand has been increasing. As in Sweden, Norwegian GDP is expected to decline by more than 3% this year.
In Finland, government support and strong domestic demand have also had a positive influence on the economic recovery. Some sources expect Finland’s GDP to fall by between 4 and 5% this year.
H.J.Hansen Genvindingsindustri A/S (DNK), Board Member of the BIR Non-Ferrous Metals Division