New quarantine measures may delay scrap shipments

Posted by aclimaadmin | marzo 25, 2020 | Noticias del Sector

The global recycling industry is beginning to experience the effects of a ‘new normal’ created by the coronavirus pandemic, reports the Bureau of International Recycling, with the economic consequences likely to be ‘huge’. ‘In many parts of Europe and North America, for example, all unnecessary travel is being actively discouraged and many business people have responded to official advice by working principally from home.’

While the ferrous scrap business is ‘still steady on both the bulk and container side, new quarantine measures for ships’ crews may begin to delay some shipments,’ says BIR. ‘On the US west coast, more container vessels are arriving to pick up empty containers and return them to Asia, so more activity is anticipated at US ports over the next few weeks with containers coming back from China. Activity at the port of Los Angeles – the largest in the USA – has been very slow over the last three weeks and its hours of operation have been reduced.

Prices 10% down

For non-ferrous scrap, the situation has been changing very rapidly. Whereas China is gradually recovering, many European countries and US states are now declaring lockdowns. ‘Given the meltdown on the world’s stock markets, the impact on the non-ferrous markets has been all too apparent: both copper and aluminium have lost more than 10% of their value within a period of just 30 days and trading has been very quiet.’

BIR points out that trading activity is also well down for the stainless steel sector. To date, scrap companies appear to be operating almost as normal, although suppliers have halted business with private concerns. ‘While the exact consequences of the pandemic are difficult to forecast, the economic impact is certain to be huge.’

Working from home

The main change to date for e-scrap businesses is the major shift towards working remotely. Even so, a slowdown in business activity is anticipated in the near future, especially if the spread of the virus is not contained and current restrictions remain in place for a prolonged period.

Over recent weeks, business activity has remained largely at the same level for Europe’s plastics producers and recyclers; prices have been stable and demand normal. From next week, however, a sharp drop in demand is expected as a result of the lockdowns implemented in countries such as France, Italy and Spain. Again, it is impossible to gauge the likely impact at present.

Chinese production growth

In Asia, meanwhile, China has slowly resumed production but factory operating efficiencies are still far from desirable levels, says BIR. ‘Most of its recyclers have been experiencing dire liquidity problems owing to very slow-moving inventories. The drop in oil prices is also creating a negative ripple effect by encouraging a buy-cheap-tomorrow attitude which will not aid recovery.’

For the tyre sector too, the outlook for Europe over the coming weeks is mired in uncertainty while prices in Asia are being hit hard by low oil prices.

Specifically with regard to rubber, there has been no impact as yet in terms of supply from Europe and demand from Asia – but this situation may change in the coming weeks, especially as many European countries are closing their borders and automotive plants are closing.

Freight and staff issues

Feedback from textiles recyclers suggests businesses are being asked to pay more to ship containers, with freight companies citing low availability as many containers are stuck within the system – both in China but increasingly across other parts of the world.

As more countries go into lockdown and restrict the movement of their citizens, staff availability could become more of an issue for textiles recyclers, BIR observes.  ‘While office-based work can be done mostly at home, and meetings can be held online, there is no remote option for emptying clothing collection banks, driving lorries, servicing charity shops (which may or may not be open or have donations) or sorting clothing.

Fuente: RECYCLING INTERNATIONAL

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