n° 169 – December 2020

At the time of writing, Russia is reporting over 25,000 new COVID cases every day as well as record death rates. The daily infection figures for Ukraine and Poland are over 13,000, while Slovakia and Romania are handling the second wave considerably better with around 4000 new cases per day.

Scrap supply had been expected to slow during the colder winter months owing to reduced street collections and the growing number of COVID cases. However, business activity remains heated owing to the higher LME levels. Largely in response to high demand, many shipping lines are offering increased freight rates for outbound destinations from Baltic and St Petersburg ports for December.

Indeed, December is traditionally a busy month in Russia as Christmas/New Year holidays and maintenance closures take place in the first two weeks of January. The positive end to the year will be helped by LME copper reaching its highest level in around seven years. Brass and aluminium are experiencing healthy demand.

Government measures to stimulate new car sales have had an effect but banks are reporting an increase in overdue credit payments. On the copper side, there has been some disruption to demand because cable sales have yet to catch up with the rising LME.

On the EU side of Eastern Europe, the growth seen in the third quarter is now being hampered by recent developments with the pandemic and the impact on spending of sluggish consumer confidence. Nevertheless, economic contraction in 2020 appears less severe than initially expected. According to the European Commission, Poland is now projected to finish 2020 with a 3.5% decline in real GDP, which is considerably more positive than was forecast earlier this year. Given the large exposure in Hungary, Czechia and Poland to the recovering automotive sector, the build-up of savings during the lockdown period and the availability of substantial government support, there is a good chance of a strong start to 2021.