n° 173 – July 2021

The German economy started expanding again in the second quarter of 2021 and all major indicators are showing positive growth signals. The expectation for the whole year is a strong rebound and growth of almost 4%, fuelled by the COVID vaccination programme. Major restrictions in Germany are gradually being eased and companies are expressing greater satisfaction with their business situation.

VDM’s business climate index for Germany’s non-ferrous industry also shows that optimism is winning out. Compared to other industries which have suffered greatly during the pandemic, the recycling industry in Germany and around the world has demonstrated what can be achieved by focusing energy on opportunities in such an environment rather than by worrying about what cannot be controlled.

The European Green Deal and the European Commission’s “Fit for 55” package to facilitate a 55% cut in greenhouse gas emissions by 2030 can be seen as an opportunity for the recycling industry. It is very important that we sit at the table when politicians are developing new rules or we run the risk of theorists trying to explain to the experts in our industry how recycling functions.

Market-wise, there is strong demand for scrap all over Europe. European aluminium billet premiums are increasing amid a continuous supply deficit. Availability of quality scrap is very tight. European secondary aluminium alloy prices, like the 226 ingot price, are steady as well. This also applies to the copper market and to other metals. Owing to very short supply and availability, it has been a seller’s market so far this year.
The only dark clouds are over the freight market. Just like metals, the shortage of freight options this year has led to higher logistic costs. The situation was discussed during the latest edition of BIR’s “The Challenge” and the shortage could continue for some more months.

As the chip industry is still not delivering enough semiconductors to the automotive sector, orders will be postponed to the final quarter of 2021 which, if viewed positively, means that demand for recycled raw materials such as aluminium and copper scrap will be strong for the whole year.