As the first quarter of 2021 draws to a close, there are promising, positive signs of a global economic recovery. The increase in global demand for industrial metals sent LME prices on one of their fastest upsurges of recent years. Copper, for example, reached its highest level in more than 10 years after breaking through US$ 9500 per tonne in February. Base metals followed this lead, with records being broken during a period in which activity levels are traditionally at their lowest owing to the Lunar New Year holidays. This year was different though, with Chinese manufacturing remaining active during the holidays as travel and celebrations were restricted by the pandemic.
Other factors in latest market developments have been strong oil prices, the stimulus package approved in the USA and, last but not least, the continuing disruptions to the copper mining industry.
In the Middle East, the scrap market has continued to show the positive momentum developed by the end of 2020. Helped by higher LME prices, a greater supply of metals is being generated and exported amid strong demand. However, the extremely volatile markets have put a lot of pressure on the trade cycle and supply chains, resulting in disruptions to deliveries and shipping schedules.
Meanwhile, the number of COVID infections remains on the rise in many places, despite mass inoculation programmes across the globe. The Oxford-AstraZeneca vaccine has come under scrutiny, especially in several major European countries where its use was suspended owing to concerns over possible side-effects. However, EU regulators have subsequently confirmed the vaccine is safe.
In the Gulf region, there has been a decrease in the number of COVID cases in the two largest economies of Saudi Arabia and the UAE, giving both a strong push in the direction of the rapid economic recovery forecast for 2021. The UAE’s vaccination programme is on track, with the target to inoculate 50% of the population by March having been achieved earlier this month.
Aboura Metals (ARE), Board Member of the BIR Non-Ferrous Metals Division