Local German scrap market moves up with support of exports

The local German scrap market has surged up in March, despite the production halts announced by a few mills which have been resisting the hikes in energy prices. The increases were the result of the uptrend observed in the international steel market after Russia’s invasion of Ukraine. “Looking at scrap export prices to Turkey, we now see that domestic scrap prices are similar to export prices,” a German source said, pointing out that local scrap quotations have been slightly higher than export prices for some time now. “If we did not have commitments to local mills, we would be sending all our material for export,” a scrap collector commented. Since domestic scrap prices have stabilized somewhat in Germany, suppliers are stating that scrap flow is not on the low side but is not high either. “Our inventory costs are rising with each procurement and so we have decided to work with lower inventory levels. We are realizing profits when we have enough stocks on hand,” one contact reported. Another contact stated that domestic scrap flow in Germany is slow, adding, “This will surely push prices up in April.” The inland freight charges in Germany have increased by €5/mt over the month of March amid higher energy and oil prices.

Meanwhile, a scrap seller in western Germany stated that their collection quotations for uncut HMS I/II scrap are in the range of €420-450/mt, while for bonus the prices are in the range of €450-510/mt. Another source reported that for cut E2/8 grade scrap prices are at €520-530/mt delivered. According to one German supplier, “Local scrap prices can easily rise by a further €30/mt in April, since scrap flow is slowing down.”

According to Reuters, German chancellor Olaf Scholz in a budget speech to parliament today, March 23, stated, “Europe will end its energy dependence on Russia but to do so from one day to the next would plunge it into a recession, risking hundreds of thousands of jobs and entire industrial sectors.” Due to the rising energy costs in the EU, there have been calls to backtrack on green production targets.

In the first 20 days of March, local scrap prices in Germany moved up by €65.5-120.5mt month on month. Additionally, the year-on-year increase is still significant, in the range of €110.9-196.4/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).