Thursday, 12 November 2020

Will the metal recycling business be able to pick up the pace once again after the pandemic?

Recycled metals are used extensively in all shapes, sizes and forms across various industries. Recycling of scrap metals is a sustainable option in comparison to mining from natural resources. Moreover, use of recycled metals is more economical and also cuts down waste generation. These factors have given impetus to the metal recycling companies in Dubai and worldwide. 

Metal recycling markets across the globe is valued at US$365.3 billion in 2020 and estimated to grow to $579.3 billion by 2027. (https://www.globenewswire.com/fr/news-release/2020/08/17/2079257/0/en/579-3-Billion-Worldwide-Metal-Recycling-Industry-to-2027-Impact-of-COVID-19-on-the-Market.html). The prospects for metal recycling companies in UAE appear to be positive while this sector is projected to grow at the CAGR (compounded annual growth rate) of 6.8% globally between 2020 and 2027. (https://www.globenewswire.com/fr/news-release/2020/08/17/2079257/0/en/579-3-Billion-Worldwide-Metal-Recycling-Industry-to-2027-Impact-of-COVID-19-on-the-Market.html )

https://www.steel-360.com/stories/recycling/uae-scrap-industry-inside-account

However, as the COVID 19 pandemic has hit economic activities globally, thus metal recycling companies have been affected too. The pandemic and ensuing lockdown restrictions have disrupted the supply chain and hampered the collection of scrap metals and its availability in the market. Further, industrial units including automotive and construction industries have either slowed-down or halted their activities. This implied low generation of scrap metals from such sectors and hence low supplies to Dubai scrap yards and across the UAE. 

metal recycling business
Photo reference: Copyright free image by pixabay


While the recycling process slackened, the demand for the end product also went down. Since factories were shutting down or restricting their activities due to COVID 19, the demand for the recycled metals also saw a dip. This prolonged low demand with scarce purchasers can also lead to accumulation in inventory, where the larger quantity of product outpaces the number of buyers.  

Steel scrap is highly valued in the market. Although steel mills reduced the size of output, scrap prices witnessed a rise in its price in May because scrap collection substantially plummeted. To counter the impending scarcity of the valuable ferrous scrap in Dubai and elsewhere in the UAE, Ministry of Economy imposed ban on the export of ferrous scrap within four months starting May 15th.  (https://metallurgprom.org/en/main/4192-obedinennye-arabskie-jemiraty-zapretili-vyvoz-metalloloma-iz-strany-s-15-maja.html#:~:text=According%20to%20the%20order%20of,in%20a%20pandemic%20Covid%2D19)

The current challenges in the metal recycling companies can be overcome with strategic policies aimed at boosting the metal recycling sector. Updated and shock resilient policies could help smoothen the supply chain from both ends. Metal scrap companies in Dubai have the potential to grow in near future. The needs for recycled scrap metals are projected to grow manifolds in industries such as automotive, construction and housewares. 

Once the pandemic has subsided and contained, metal recycling business will be able to pick up the pace and tackle any economic slow-down. Aluminum, steel and copper scrap will retain its value in the recycling markets of the UAE for the need for these recycled metals are unending.    

Lucky Recycling, a trustworthy business entity uses advanced technologies to ensure sustainability and the generation of value from scrap metals. Recycled metals are here to thrive and Lucky Group is the vanguard of sustainability in metal recycling sector.   

Disclaimer: This article(s) has been prepared solely for information purpose, using publicly-accessible sources that are believed to be accurate and reliable at the time of publishing. LUCKY GROUP accepts no liability whatsoever for any loss or damage resulting from the use of information, images or opinions expressed in the report. LUCKY GROUP does not give warranty of any kind regarding the completeness, accuracy and reliability of the information included in the article(s).


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