The deteriorating sentiment which has been observed across all European scrap markets has also been affecting the local scrap market in Germany. Some mills have already closed their monthly contracts, purchasing at €10/mt lower than in June.
In particular, declines by an average of €10-13/mt have been reported in eastern German scrap prices, while it is likely that a similar decline will be observed in the western part of the country, following aggressive reductions in scrap purchase prices in Luxembourg. Several market sources, in fact, have confirmed that E1 scrap prices in Luxembourg have been reduced by €20/mt, while scrap purchase volumes in western Germany will be cut by around 80,000 mt in the coming three months. This reduction in scrap prices and volumes is due to the fact that a major mill will idle production in the summer due to maintenance works at one plant aimed at increasing its capacity. Volumes purchased should then return to normal in the fall.
Apart from that, sources have reported a quiet market, as many players are already on holiday. Some mills will stop production for two to four weeks between mid-July and mid-August and their scrap demand is on the low side. “Sentiment is bearish”, a local scrap seller commented. “My suppliers have accepted a €10/mt decline without even negotiating,” he added.
On the export side, HMS I/II 80:20 scrap prices have been reported at €250/mt DAP, stable overall but declining by €5/mt on the higher end of the range compared to last week.
