NEW YORK (Scrap Register): Global gold recycling shot up by 17 percent to 1,308.5 tons during last year from 1,116.5 tons in 2015, was concentrated in the first three quarters, fueled by the rise in the gold price. At its peak, gold was almost 30% from end 2015 levels? these higher prices created an environment in which recycling thrived.
In Western markets, Q4 recycling volumes were 4% higher than Q4 2015, but 10% lower than Q3 2016. The lower price in Q4 dented US recycling. But European recycling levels were healthier as a weaker euro supported the local gold price. The available pool of nearmarket supplies was also a factor, with some European markets, such as Spain and Italy, having a greater volume of available stock to recycle.
The Middle East saw a regional rise of 28% in Q4, predominantly due to Egypt, where currency weakness encouraged consumers to sell back. Turkey was a key exception, both regionally and globally: recycling fell in Q4 on the back of a rallying cry by President Erdogan for Turks to forgo holding foreign currencies in favour of gold or the lira.
Recycling in India was hit by the government’s shock demonetisation announcement, falling 36% yoy and 67% qoq in Q4. The liquidity crunch affected jewellers, who struggled to obtain cash to purchase gold from consumers, blocking a key recycling channel and resulting in a surge in goldforgold exchange.
In East Asia, Q4 recycling was up 7% yoy, but down 44% from Q3 as the focus switched to buying gold ahead of the Chinese New Year (28th January).