Brussels — According to David Chiao, President of the BIR Non-Ferrous Metals Division, July has been a roller-coaster month with two major issues greatly impacting the branch – even though neither is directly related to non-ferrous supply and demand.
Firstly, the Greek national debt crisis has weakened the Euro in relation to the Dollar, thus leading to non-ferrous commodity trading at lower prices when converting to the US currency, to which many Asian countries tie their exchange rates.
Secondly, China’s stock market index has been in freefall from 5.100 to 3.500, plunging consumer confidence to a real low point. A comment from the International New York Times best describes the situation: „China’s stock market doesn’t follow the economy; the economy follows the stock prices.“
All the indicators show that the Chinese economy has shrunk and that no other markets can replace its demand. „With many parts of the world in the summer period of seasonally slower demand and supply, and with the compounding effect of the Greek debt crisis and of China’s tumbling stock market, we seem to have a rocky road ahead of us“, David Chiao forecasts
Source: Bureau of International Recycling