Local German scrap market moves up in April to catch up with export prices

The local German scrap market has moved up further in April, seeking to catch up with the strong export prices from the EU region. Local scrap prices in Germany were close to the export quotations at the end of March, and through the month of April German mills have increased their domestic scrap procurement prices further to the levels of export prices to be able to secure tonnages. However, with the sentiment changing in the international scrap market, the estimations for the local German scrap market have also turned negative.

SteelOrbis observes that export yards in the Netherlands have slowed down their scrap purchases over the past weeks. As a result, some German suppliers state that they have also decreased their collection prices. “Despite the decreases in quotations, the flow to our yards is good. For example, we reduced our collection prices by €50/mt and the flow only decreased by 30 percent.” However, there is concern about the production utilization rates in Germany for May, one source commented, adding, “Some mills have already cut their utilization rates by 25 percent and there are rumors that others will follow suit in May. If this happens, domestic scrap prices may move down by another €30/mt.”

Also, the euro-dollar exchange rate is giving European sellers an advantage when they sell abroad. “This may impact the local market negatively,” a source commented. Another source said, “Our prices for HMS I/II 80:20 scrap have decreased to €460-470/mt delivered to the Netherlands, $30/mt lower than the previous sales prices.” One German supplier said, “I think the decreasing trend will stop just after the first export sales. We observe good demand for steel in Germany. I do not believe domestic scrap prices will decrease a lot from the current levels.” As a result, the expectations for the future trend of the local German scrap market are diverse, but SteelOrbis believes that it may show a greater tendency towards a decrease in May.

According to the latest data provided by the BDSV, in the first 20 days of April local scrap prices moved up by €5.9-33.6/mt month on month. Additionally, the year-on-year increase is still significant, in the range of €133.4-230/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