Domestic scrap prices in Germany decline in October

Amid Turkey’s reluctance to pay higher levels for deep sea scrap cargoes and due to the negative sentiment in the international scrap and steel markets, the local German scrap market has moved down over the month of October. This possibility had already been voiced by market players at the end of September and the decline is in line with expectations. The high interest rates in the country at around 4.6-4.8 percent are also hindering steel demand, SteelOrbis understands. German sources agree that scrap availability is decreasing in the country, but the lack of demand has a deeper impact on prices.

For the coming month, domestic scrap prices in Germany are expected to continue their declining trend. According to a German source, “Earlier this month, delivered prices in Europe’s scrap export yards were in line with European steelmakers’ domestic scrap procurement prices. However, following the lower quotations recoded in Turkey’s recent import scrap deals, European mills will ask for a cut in scrap prices in November.” Another Germany-based sub-collector agreed, adding that they are not in a rush to sell many tonnages during the remainder of the year, “We had a good year. We can now collect and increase our inventory levels to wait out this year.” This seems to be the general idea among European sub-collectors, with some voicing expectations for a price increase in January. Currently, collection prices in the EU stand at €375-380/mt DAP but “this range attracts no scrap,” one European exporter said. An exporter noted, “If one wishes to preserve scrap flow to yards, one needs to pay at least €290/mt DAP.” SteelOrbis hears that scrap demand in Italy, Austria and Switzerland is now on the low side as producers in those regions are cutting their production rates or taking breaks from production, also supporting the idea of a price decline in Germany.

According to the latest data provided by the BDSV, in the first 20 days of October, scrap prices moved down by €1-15.1/mt month on month. Additionally, the year-on-year decrease is now in the range of €7.4-26.9/mt. Prices are average prices for domestic transactions across Germany in the first 20 days of the given month. The prices are provided by Bundesvereinigung 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