The most profound development in this area since the previous Mirror report has been the Regional Comprehensive Economic Partnership (RCEP) - a free-trade agreement involving the 10 member states of the Association of Southeast Asian Nations (Asean), namely: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, plus five of their free-trade partners Australia, China, Japan, New Zealand and South Korea. The world’s largest free-trade agreement by population and GDP, the RCEP will bring huge tariff cuts for its Asean and Pacific Rim members, including China.
The benefit to South East Asia from the RCEP is projected to be US$ 20 billion annually by 2030. It is expected the RCEP will eventually remove up to 90% of the tariffs on imports between its member countries. Along with China’s swift recovery from the economic downturn due to the COVID-19 pandemic, this should supply South East Asia with a much-needed economic boost.
Copper supply is expected to fall short of demand in the upcoming year. According to a forecast released earlier this month, analysts believe copper prices could soon test their existing record highs. The industrial red metal recently rose to its highest level since 2013, trading above US$ 7700 per tonne. The bull run on copper is attributed to: a weaker US dollar; the increased optimism owing to Coronavirus vaccines; and higher demand from China as a result of the reclassification of certain non-ferrous scrap products. With this resumption of imports of certain high grades of scrap copper, brass and aluminium alloys, scrap companies in the region are expected to play a larger roll in supplying China with much-needed raw material.
Many scrap recycling businesses operating within South East Asia have already established themselves as major non-ferrous scrap consumers. Combined with the newly-established RCEP and China’s rapid economic rebound, the future remains bright for the non-ferrous scrap industry in this region.
Liberty Iron & Metal, Inc. (USA), Board Member of the BIR Non-Ferrous Metals Division