Global trade shifts: How new tariffs and policies shape the recycled metals market

The EU has imposed provisional tariffs on Chinese electric vehicles of up to 37.6%, effective from July 5, in addition to the standard 10% duty. The move is the result of an anti-subsidy investigation that started in October. The four-month window for the provisional tariffs is expected to occur with ongoing talks between the EU and China.

Implications
▪ Potential reduction in Chinese aluminum demand
▪ Impact on global scrap supply chains
▪ Divided EU stance: Germany opposes the tariffs due to car sales dependency whereas France supports it

India’s anti-dumping duties on Chinese solar panel frames

Five-year anti-dumping duties range from $403/t to $577/t on aluminum frames for solar panels from China. The investigation period from April 2022 to March 2023 follows a domestic producer’s application.

Implications:
▪ Protection for domestic aluminum producers
▪ Increased local demand for scrap aluminum

Press Metal’s collaborations in EV and solar markets

In Malaysia, Press Metal’s projects means new supplies such as aluminum battery cases and car bumpers to Chinese vehicle manufacturers. It also has completed a 30,000-t PV module production line for solar.

Implications
▪ Boosted demand for aluminum, including scrap aluminum
▪ Enhanced production capacity

Brazil’s solar energy milestones

New solar generation hit records in the Northeast region of the country at 9,598 MW and 9,760 MW, according to the Ministry of Mines and Energy. Brazil’s solar photovoltaic capacity is at 43.6 GW.

Implications
▪ Increased demand for solar components such as aluminum frames
▪ Positive impact on scrap metal prices

So, what does this all mean for you?

Volatility and expectations

• Current Trend: Modest losses in aluminum, zinc, lead, and nickel; slight gains in copper and tin.

• Outlook: Increased volatility expected ahead of China’s Third Plenum session starting July 15, with potential stimulus measures in focus.

Precious Metals and Oil

• Gold and silver declined on Monday but saw slight gains on the morning of July 9.

• Oil fell to a one-week low with steep declines in gasoline and diesel due to Hurricane Beryl’s impact, causing severe flooding and power outages in Texas.

Geopolitical Developments

• In France, far-right parties underperformed in parliamentary rankings, while the left and center-left work on coalition formation.

• In the U.S., Biden’s candidacy continues amid questions about his campaign’s viability against Trump.

U.S. Economic Indicators

• Fed’s Inflation Outlook: Median year-ahead inflation expectations decreased, with Fed Chair Powell’s upcoming testimony likely influencing market expectations for a rate cut in September.

• Market Response: U.S. equity markets are expected to open higher after mixed results on Monday. Treasury yields rose ahead of Powell’s testimony.

Key Takeaways

Aluminum Price Stability: Indicates a balanced demand and supply scenario.

EU Tariffs on Chinese EVs: Could disrupt Chinese aluminum demand and affect global scrap supply.

India’s Anti-Dumping Duties: May lead to higher domestic demand for recycled aluminum.

Press Metal’s Growth: Highlights a rise in aluminum demand, impacting scrap prices positively.

Brazil’s Solar Records: Reflects the growing significance of renewable energy, driving up demand for aluminum components in the scrap metal market.