Different outlooks have emerged in the local German scrap market this week as Turkish mills have become more present in the import scrap market.
Turkish mills have suddenly found themselves in urgent need of buying scrap quantities and are finding it hard to secure volumes from European scrap exporters due to a number of reasons. First of all, high freight rates are postponing scrap deliveries, and, second, German scrap export yards have reported very low inflows of material.
According to some market sources, German sub-collectors are trying to hold on to their stocks rather than selling them to local mills or to export yards, while waiting for a price increase. In fact, export yards are paying €250-255/mt DAP for HMS I/II 80:20 scrap, and collection costs for uncut material have been reported at around €200/mt delivered, causing export yards to maintain a wait-and-see stance.
“They are waiting for the right moment to close a deep sea cargo deal, but, as far as I hear, most of them are currently sitting on very high stock levels,” a German source commented, adding “Yes, export prices have slightly increased, but Turkey is not actually facing a shortage of scrap from Europe. At the moment, they are focusing more on sourcing material from the US, the UK and Scandinavian countries, and are only buying limited quantities from us on the mainland.”
Market sources are not really observing a scrap shortage at the moment, as some scrap collectors have continued to receive offers, as demand from local mills is reportedly not on the high side. Therefore, the €5-10/mt scrap price increase that some market players were hoping for in November is unlikely, even if the fall in scrap prices in October in the local German market was significant.
Moreover, in Italy scrap market players buying from Germany are bidding at unchanged prices for November purchases, and November scrap purchase prices coming from Austria have surfaced in the market with a €10/mt decrease for both new and old scrap categories.
