German and Polish scrap markets move down in line with initial expectations

In line with the initial expectations voiced by SteelOrbis, domestic scrap quotations in Germany and Poland have moved down during August.

Despite the decreases observed in the local German scrap market, the fall has been lower than anticipated levels. Market players state that selling scrap domestically is still more profitable compared to shipping scrap to other destinations, such as the Netherlands. Most sources believe that scrap prices have little room to decline further. While some major mills domestic scrap procurement prices are reportedly in the range of €380-390/mt delivered, a German source states that “if some big cargoes are sold to East Germany from neighboring countries, no one should be surprised.” Also the margins of scrap sellers are tightening more than the reduction recorded in sales prices, SteelOrbis understands. A player states that there was an offer from Germany to the Netherlands at €330/mt, while their collection quotations are in the range of €315-320/mt but there are additional costs of cutting. It is also said that the UK sellers have more advantage against German suppliers due to the exchange rates. As a result, market players think that local German scrap market is still strong in terms of demand and there is no need to cut prices for exports under the current conditions as they think in the second half of September there will be a shortage of scrap in Germany and the Netherlands. Not one but several sources state that foreign buyers that are seeking for higher qualities such as shredded and bonus shall reconsider their pricing strategies if they do not wish to stick with just HMS I/II 80:20 in the future.

According to the latest data provided by the BDSV, in the first 20 days of August local scrap prices decreased by €7.2-29.7/mt month on month. On the other hand, the annual increase is significant in the range of €165.2-245/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

Meanwhile, prices in the local Polish market for HMS I scrap are at around €420-425/mt DAP. This level is considered to be very low by market players, hence no further decrease is expected in Poland since domestic demand is high. Polish sources state that they are also receiving good demand from Germany.