Scrap prices in the local German market have remained mostly stable this week, though market participants are already talking about price rises foreseen for March. On February 23, elections were held in Germany, and the new coalition government will have an influence on the reshaping of the German economy.
According to several sources, the winning party of Friedrich Merz (CDU/CSU) will give good support to national industry, and, since Germany is the leading economy in Europe, this will also have a positive influence on the overall EU economy and particularly on the steel industry. Other market players, though, believe that no changes will be seen until the second half of the year.
In the meantime, the stagnation of the construction sector and the slowdown in manufacturing industries are affecting scrap availability in the local market. Moreover, amid the carnival festivities in March, some companies may halt their production, thinning new scrap generation further. This is one of the reasons why many players in the market are already talking about a €10/mt rise in March, and, in fact, one important mill in northeast Germany has already closed some spot contracts for medium-sized scrap lots raising its purchase prices by €5-8/mt. Despite the increase in scrap prices, though, demand from mills is declining in terms of volumes, as they are still struggling with finished steel sales.
At the same time, the favorable euro-dollar exchange rate may push exports in the coming period. “The local bonus [scrap] and export bonus [scrap] price gap is normally €30/mt, but at the moment it is only €3/mt, so exports are attractive,” said a local German sub-collector. Collection prices to export yards are still in the range of €305-310/mt for HMS I/II 80:20, unchanged week on week.
To conclude, market players remain cautious, and they are waiting to see what will happen with the new government and with Trump’s decisions on import tariffs. In the meantime, though some of them are hoping for stability in March, most players seem certain that a new rise in scrap prices will come.
Finally, no major changes have been reported in the local Polish scrap market this week. The sluggishness continues overall, scrap inflows are still slow and demand from producers continues to be regular, making scrap prices stabilize at a high level.
As per local collection prices to export yards, they have also remained stable week on week in the range of €310-320/mt DAP for HMS I/II 80:20 scrap.