29 November 2022 – Scrap prices are rising, especially in the United States. But Europe is also seeing a decent jump in prices. Is the next shortage of shipping space coming? New CO2 standards planned for 2023. And would the LME like to be the real hero in the nickel crisis?
Is a new shortage of shipping space coming?
With the introduction of new rules to reduce GHG emissions from international shipping in 2023, there is likely to be a reduction in shipping space and speed limits on the world’s oceans.
IMO wants to reduce CO2 emissions
The International Maritime Organization’s (IMO) planned new environmental standards, which are supposed to contribute to a reduction of CO2 emissions due to ship movements of at least 40% by 2030, are encountering too low a rate of new ship construction. Among other things, this is due to limited shipyard capacity.
Overall, analysts assume that this will lead to rising freight rates again, not only for the transport of containers. In addition, there is a massive lack of contracts for newbuildings for tankers and dry bulk carriers.
Scrap prices on the upswing
There are increasing reports from the United States of a growing shortage in the availability of certain types of steel scrap. Many buyers are already running into shortages and are desperately looking for immediately available material, to the benefit of scrap prices. This is causing prices there to rise by up to 8% in some cases.
Scrap prices on the LME are also rising sharply, with a jump of 3.5% recorded there yesterday.
LME the “real hero” in the nickel crisis?
Since the nickel crisis in March 2022, the LME has been accused of unjustifiably intervening in the nickel trade. This accusation has even been brought before a British court by some companies.
Death spiral or saving favourites?
According to media reports, the LME has now defended itself against these claims and sees itself as the saviour of the entire nickel market from a $20 billion “death spiral”. Moreover, seven LME clearing members would have been in danger of defaulting if the LME had not acted.
What does the LME really know about its markets?
At the same time, the LME also seems to claim that it knew nothing about the involvement of Tsingshan Holding Group Co with its massive short position, which was the focus of the nickel market bottleneck. This was despite the fact that at least one LME clearing member had been one of Tsingshan’s major backers in the failed nickel trade.
“You’re only being lied to if you believe it,” Thorsten Gerber, CEO of the Gerber Group, said today about these reports.
- Chinese aluminium warehouse inventories continue to fall
- EU Safeguard Review opens with tough claims
- Further support for commodity prices in 2023
We at the Gerber Group have been trading in stainless steel worldwide for over 20 years. We are your experts when it comes to purchasing, import, logistics and services. Information is a vital part of this. Because only then can you and we make the right decisions. Do you have any questions? Contact us now.
Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.