The first rumors about scrap purchase negotiations in February in Germany have started to circulate this week. Even if the initial outlook was for stable prices for the current month, according to the first information collected by SteelOrbis some local German mills are already increasing their scrap purchase prices.
After the announcement of an Austrian producer of a scrap purchase price increase of €15/mt for both old scrap and new scrap, a couple of local mills in Germany have decided to increase their scrap purchase prices. One mill in the eastern part of Germany has increased its scrap purchase prices by €25/mt for all categories, but it is likely that their previous level was too low compared to the market average and now they are adjusting. Another mill in the northwest of the country has increased its scrap purchase prices by €15/mt for new scrap and by €20/mt for old scrap.
“Mills are producing at a regular pace, and scrap availability is still limited,” a German trader commented. “But the finished steel market is not in good shape, and I am worried that scrap prices in March will drop significantly after the current increases,” he concluded.
Scrap scarcity is also weighing on the Polish market, where mills are buying every available tonnage at higher levels. Moreover, the Ukrainian ban on scrap exports is causing Polish mills to struggle with higher production costs, since, even though Poland is not traditionally a net importer of scrap, buying material from other countries helped keep local prices under control. At the moment, in fact, average scrap prices in Poland are standing at around €300/mt delivered, versus €200/mt delivered in Ukraine. Finally, according to the latest market information, scrap exporters in Poland are willing to pay around PLN 1,050/mt (around €248/mt) DAP for HMS I, but a source has confirmed that at the moment there are “no volumes to be bought”.