Local German scrap market moves up in January

The local German scrap market has indicated an increase in the first month of 2023. The accelerated demand coming from European mills after their return from the holiday is the main reason for the price increase, while rising flat steel quotations have also supported prices. According to a German source, German mills were late to return to the market and so their demand was not back to full strength in January.

“I believe that in February demand from EU-based producers will be higher than in January,” a sub-collector said. Scrap flow has not recovered fully in Germany due to the winter weather conditions. Although construction activity in Germany has slowed down significantly, “The situation is related to the increased loan interest rates,” a German source commented.  SteelOrbis learned that the annual loan interest rates in Germany have increased from 0.9 points to 4.5 points. Another source said that German suppliers will not be interested in selling to export yards at lower price levels when the domestic market is at €321.9/mt for E1 grades. “Not just German but Italian and French steelmakers have also raised their scrap procurement prices this month. Despite the pressure on export scrap quotations, we are not seeing this reflecting in the local market,” a market player said. French mills increased their procurement by €15/mt in the last week, SteelOrbis understands. As stated in previous reports, with Italian suppliers asking for a €30-40/mt increase on average, the local Italian scrap market has moved up and is expected to remain stable.

For February, expectations vary. Some players believe that local prices will remain unchanged in the EU region for two weeks and will soften afterwards. Some think that the rises in flat steel segment may be enough to support the market. Most market intermediaries believe that scrap prices will move up due to their expectations of higher demand in the EU region. All players are monitoring Turkey’s response to the current deep sea scrap offers. SteelOrbis reported today that ex-US HMS I/II 80:20 scrap in Turkey is at $410/mt CFR fixed in a deal, and US suppliers are aiming for $415/mt CFR and above in the future.

According to the latest data provided by the BDSV, in the first 20 days of December scrap prices in German moved up by €16.2-29.2/mt month on month. Additionally, the year-on-year decrease is now in the range of €24.9-95/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