As expected, local German scrap prices are marking deep declines in the new round of purchases in May. After April purchases were closed very early in the month, mills are now adjusting to the new market levels, with declines ranging between €30-40/mt.
A major mill in Germany declined prices by €30/mt, and another declined its purchase prices by €40/mt. According to a trader, although, the situation on the local scrap market is getting better, and scrap consumption will recover soon aided by the new government coalition of the conservative party, which is traditionally “industry-friendly”, a source said. Market players, in fact, hope that this new government will boost investments in the manufacturing and infrastructure sector, helping finished steel demand to rise again after the stagnation period.
At the same time, though, sources reported that several German mills are planning to idle their plants for maintenance for six to eight weeks between May and June, signaling that – even though scrap demand is actually recovering – steel mills are not yet in the condition of selling enough finished steel and they prefer to undergo maintenance, also taking advantage of Pfingstmontag holiday period (June 7-10).
As for exports, a local German sub-collector reported that they are receiving bids from exporters in the range of €255-260/mt DAP for HMS I/II 80:20 scrap, approximately €5/mt higher than last week.