Local German and Polish scrap prices increase in March from February

As anticipated, local scrap prices in Germany and Poland have increased during March. However, due to slow trading activities and the low number of deals concluded in some regions of Germany during this period, no average price has been determined. Market sources state that German steel scrap recycler association BDSV also has gaps in its data and so market players plan to use previous price levels as the basis for transactions in the coming period. On the other hand, according to some market sources, some exporters have stopped purchasing domestic scrap in Germany, citing the slowdown in export sales. This has resulted in slower scrap trade particularly in Germany’s northern and western regions where the collected scrap is mostly sold to exporters. Domestic scrap prices in the country’s southern regions have increased as the collected material is mostly sold to the local market, while the higher prices have been explained by the lively demand in the domestic market. It is reported that some local suppliers that have had no opportunity to keep their inventories in hand may focus on sales to their domestic market instead of on exports. Meanwhile, the German government’s decision to invest €86 billion to renew its rail systems with a plan that will be completed in ten years has attracted the attention of market players. Some market sources state that this investment could revive scrap transportation in the medium and long terms and could circumvent disruptions of river transportation that are seen from time to time due to changing water levels or freezing weather. The investment in question has been introduced within the scope of Germany’s targets to reduce its carbon footprint against the backdrop of global warming, while it is also the biggest investment made in the rail systems in Germany for 180 years. Additionally, today, March 24, German chancellor Angela Merkel has cancelled plans for an Easter coronavirus lockdown scheduled for April 1-5.

According to the latest data provided by the BDSV, in the first 20 days of March local scrap prices increased by €29.3-33.3/mt on average month on month.

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).

The average price levels recorded in the transactions concluded during March in Germany in specific regions are as shared below, all ex-works:

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 have increased significantly by €138-140/mt month on month, with HMS I scrap prices moving down to around €360/mt DAP. However, market players in the country said that prices are expected to decrease in the coming period, at least by €20/mt, as finished steel prices have reached very high levels, which are not considered to be workable. But there are also some availability problems observed in the Polish market, particularly on the flat steel side, which may support scrap quotations in the coming period.