The prospect of regulatory approvals for COVID-19 vaccines in time for distribution starting in December has meant that the past two months have seen the exact opposite of what had been witnessed for most of the year. The positive news about vaccines has led to a rally among the base metals, with copper leading the way in reaching seven-year highs on the LME nearing US$ 7800 per tonne. Lead, aluminium and nickel followed copper higher.
These rallies have put extra pressure on the market, with more scrap metals being offered at a time of slowing demand as refiners and mills all overstocked. Copper buyers are booking already for first-quarter arrivals, thus adding to the pressure on the supply chain.
Some sense of stability has returned to the economies of the Middle East, and especially to the Gulf region, given that the COVID-19 situation is relatively under control and the number of cases has been stable for over two months, helping sectors to recover almost to pre-pandemic levels. In Saudi Arabia, infections have dropped to their lowest levels since March this year, making it reportedly one of the safest places to travel. The UAE’s tourism and travel sectors have been bouncing back amid the continuous easing of COVID-19 restrictions and policies, especially the no-quarantine policy for travellers with negative test results. Higher case numbers in Jordan and Lebanon, however, have prompted the authorities to impose further curfews and partial lockdowns.
On the non-ferrous side, scrap metal yards and traders have been busy amid signs of regional market recovery owing to the vaccine news and optimism for the coming year, resulting in a greater supply of material as well as demand from buyers. Across the Middle East, scrap yards and the main sea ports have been running smoothly over the past couple of months, prompting the generation and shipment of increased volumes and ending the disruptions faced during the lockdowns.
Aboura Metals (ARE), Board Member of the BIR Non-Ferrous Metals Division