Local German scrap market declines in May as anticipated

As anticipated by SteelOrbis, domestic scrap prices in Germany have generally moved down during May. Despite the lower supply volumes, the slower production rates of German steel mills and the lack of support coming from the scrap export segment have pushed down prices. “Despite the fall in domestic scrap quotations, we think this is not so bad. German mills continue to buy scrap in small tonnages due to the decreasing trend. They want to stock up a bit,” a collector in Germany said today, May 23. 

For the month of June, market players believe there is not much room for another softening. “Our own collection prices are above €260-270/mt. With the freight to export yards which is around €20/mt, we cannot accept lower than €300/mt DAP to export yards now,” a German sub-collector commented. This also means that European scrap suppliers cannot collect high tonnages of material for export at around €300/mt DAP. This information is in line with comments from SteelOrbis contacts, to the effect that HMS I/II 80:20 grades are being offered at €305/mt DAP and above to European export yards right now. Another sub-collector said high interest rates and the fluctuating euro-dollar exchange rate are not helping the situation. He stated, “German mills report a significant lack of finished steel demand, with their order books almost empty for the coming months. Hence, their production rates are not expected to recover in the short term.” While domestic scrap prices in May were considered more attractive for sellers as compared to exports, one source said he believes that in June both local and export prices will be balanced. “I think domestic scrap prices will get in line with export prices due to the lack of sustainable demand,” the source added. 

According to the latest data provided by the BDSV, in the first 20 days of May, scrap prices moved down by €29.7-48.2/mt month on month. Additionally, the year-on-year decrease is now in the range of €97.8-152.6/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