Sitting on a gold mine

 

The Waste Electrical and Electronic Equipment (WEEE) forum estimates there is a global ‘mountain’ of electrical and electronic waste from washing machines to laptop computers and smartphones. The weight of discarded electronic devices could amount to as much as 74million tonnes by 2030. The average UK household is estimated to have about £600 of unwanted and idle technology – that could be worth up to £15bn!

While most local councils in the UK now attempt to re-cycle many smaller electrical appliances such as electric kettles and toasters, research suggests many people keep old mobile phones, rather than recycling them. The International Telecommunication Union estimates that in the UK, there are more than 20million unused, but working electrical items. WEEE believes smartphones could provide an important source of materials used in many renewable technologies.

As with any re-cycling projects, the key is having the necessary technology to do so at a viable cost. Last year, the Royal Mint announced plans to introduce a world-first technology to the UK to re-cycle gold from electronic waste. The Royal Mint has signed an agreement with a small Canadian business to recover over 99% of the gold from the circuit boards of electronic devices.

At a time of so many negative political and economic headlines, it is encouraging to see Royal Mint pioneering a new re-cycling technology. It’s not quite a gold mine, but does remind us of the time, quite a few years ago when some investors got very excited about BT and the switch to fibre and the potential value of the thousands of miles of copper cable under our pavements! Not so funny, is the more recent growing trend of thefts of car catalytic converters.  The average cost of a car insurance claim is £1,500. Catalytic converters contain platinum, palladium and rhodium – all very much in demand with the shift to renewable energy. You might be sitting on a gold mine for thieves! -The law of unintended consequences?

What have we been watching?

A Brazilian referee who seriously needs to book an appointment at Spec Savers and yet more England penalty pain!

We head towards Christmas with markets still focused primarily on US interest rates, the easing of lockdown in China and the war in Ukraine. Indeed, we have an important week ahead with US inflation data and four central bank interest rate decisions – Federal Reserve, Bank of England, European Central Bank and Swiss National Bank.

The war of attrition in Ukraine rumbles on. Putin acknowledged his ‘special military operation’ is taking longer than expected and also admitted ‘Of course, it could be a lengthy process.’ Meanwhile, three air bases suffered drone attacks deep inside Russian territory. Hungary continued to frustrate the EU and blocked another financial aid package for Ukraine.

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As the Artic blast hit the UK last week, the US confirmed it is to double its gas exports to the UK to enhance our energy security. The Bank of England is expected to increase interest rates by 0.5% to 3.5% with the dilemma that because it is behind the curve on tackling inflation, and that the economy has moved into recession yet the central bank hasn’t finished the current rate hike cycle!

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In Europe, the main shock story of last week without doubt was the police raids against an alleged far-right plot to overthrow the German state inspired by the US capitol attacks! The European Central Bank is expected to increase interest rates this week by 0.5% to 2%.

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In the US, the November ISM non-manufacturing index improved to 56.5, a thirtieth straight monthly expansion. Investors remain hyper-sensitive to Federal Reserve (Fed) interest rate policy so the stronger than expected ISM services data initially nudged US bond yields higher. The Fed is expected to end its run of 0.75% interest rates hikes with a 0.5% increase.

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China’s trade data for November showed the weakness in global demand with both exports and imports down and much weaker than expected. Confirmation that China will relax some of its Covid rules with home quarantine approved and the retirement of its app to track Covid-19 contacts did however help sentiment.

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Despite the Artic blast across Europe, Brent oil languished at $77 as concerns remained about global demand in 2023. Meanwhile, the EU has put in place an international price cap on Russian oil.

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Finally, yet another sign of how times are changing. Data from Ordnance Survey has revealed the full extent of the change in Britain’s high streets following the pandemic. Not surprisingly, the number of department stores, clothes shops and bank branches have all fallen significantly. While beauty salons, tattoo and piercing studios as well as fast food and takeaways have prospered. Bank branches will continue to close given the ongoing shift to online banking, but how will these new service sectors fair during the cost-of-living crisis and recession?

Read Last Week’s Alpha Bites – Is meat no longer murder?

 

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Alpha Portfolio Management is a trading name of R C Brown Investment Management PLC which is authorised and regulated by the Financial Conduct Authority.