Metal Recycling

Necessity or a Trend?

Munich, 08 June ’22

The war in Eastern Europe has clearly shown us that metals are not infinitely available and their uneven distribution leads to great dependency worldwide. In the meantime, we can no longer speak of inflationary trends in metal prices, but must now speak of a higher price level settling in the medium term, which is due to the supply-demand situation. This is because the supply of copper, nickel & co. is limited in the medium term, as raw material mines cannot expand their production capacities from one day to day; are still limited by ecological barriers and influenced by political decisions. In addition, many mines can no longer be operated profitably at the current high energy prices and this will ultimately lead to closure. It will take years to expand capacities and the supply deficit will worsen. Despite the threat of recessionary trends in the global economy in the short term, demand for metals will continue to increase as our world continues to address the issues of electrification and technologization at top speed. The question is therefore: how can this demand gap for metals be closed in the medium to long term?

The development of recycling capacities for metals, especially for industrial metals, is definitely a solution to this. In China, the development of recycling capacities for steel dust has therefore been under discussion for some time. This step is intended to make China less dependent on Australia as the most important supplier of iron ore. There is also a need to recycle copper. The expansion of renewable energies stands and falls not only with political decisions but also with the availability of the red metal. Politicians are called upon to make the right decisions to pave the way for the recycling business in the long term.

If necessary through subsidies, so that longer phases with increased energy costs (as at present) do not bring the expansion of recycling capacities to a standstill. Especially for the metal processing industry (e.g. steel producers), it should be of great interest to invest independently in such recycling capacities in order to increase their own independence from international raw material suppliers.

For investors on the stock market, metal recycling should be highly interesting in the medium term, as it not only promises ESG-compliant investment opportunities, but will be absolutely necessary politically and economically.


Article by Markus Polz

Head of Asset Management at CM-Equity AG





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