Another rise observed in German and Polish scrap markets

Another sharp increase in the local German scrap market has been observed during June. Since SteelOrbis’ report published on June 15, domestic scrap prices moved up further in Germany. Market sources report that local demand in the country is still very strong, particularly for prime grades, similar to the tendency observed for all markets due to the lack of material. Having been rising since February, the local German scrap market still has the potential to move up further in July, according to some market players. Others think that prices are stable for now, and that demand for E3, E5 and E8 grades of scrap continue. A German scrap seller in the western part of the country stated that demand is strong enough and that they are receiving demand from some non-regular buyers. Water levels of rivers in Germany will decrease and this means an increase in freight charges in the local market. On the other hand, July and August are the holiday months in Europe. Some market players think the situation will have to be monitored closely since some major steel producers are set to halt production during the holiday season. Additionally, several market players have stated that there are large tonnages available of HMS I/I 80:20 scrap which is mainly destined for exports, adding this may result in lower prices both locally and for export.

According to the latest data provided by the BDSV, in the first 20 days of June local scrap prices mostly increased by €33.5-57.4/mt month on month. Prices are average prices for domestic transactions across Germany in the first 20 days of the given month. The prices are provided by undesvereinigung Deutscher Stahlrecycling-und Entsorgungsunternehmen e.V. (BDSV).

Specifications:
E1 - Old steel scrap: thickness ≥ 4 mm, maximum dimensions 1.5 m x 0.5 m x 0.5 m
E2/E8 - New steel scrap: maximum dimensions 1.5 m x 0.5 m x 0.5 m
E3 - Heavy old steel scrap: thickness ≥ 6 mm, maximum dimensions 1.5 m x 0.5 m x 0.5 m
E40 - Shredded scrap: excluding incinerator steel scrap and collection scrap; density ≥ 1.1 mt/m3, Fe ≥ 92%
E5M - Turnings: excluding iron and automatic steel turnings

Meanwhile, prices in the local Polish market have also increased month on month, with HMS I scrap prices moving up from around €385-390/mt DAP to approximately €450-460/mt DAP. Demand in the Polish market is quite strong, according to market sources, who are also adding that there is a lack of material in the market. This situation is the result of Polish mills’ full order books, one source added, as well as the high levels of domestic finished steel prices in the EU region. Hence, in the Baltic region exports are generally not considered to be attractive for now, another source commented. Having said that, market players think that prices in the local Polish scrap market will remain stable during the summer season due to the approaching holidays.