At the end of scrap purchase negotiations in the local German scrap market, May scrap purchase prices have declined by the range of €20-30/mt, with peaks of minus €40-45/mt depending on the initial levels. Amid this pessimistic scenario, low water levels in the Rhine are still causing delivery issues.
Just like in Italy, the availability of scrap in the local market is on the low side, and scrap suppliers prefer to hold their stocks instead of selling immediately, waiting for prices to rise again. Since mills have cut their prices, scrap dealers in the local market are also forced to lower their collection prices, and this condition has created a domino effect, resulting in a widespread reluctancy from peddlers to give in their volumes. For this reason, sub-collectors might find sales to export yards more appealing, thus generating a higher scrap flow towards these destinations. As of today, May 15, HMS I/II 80:20 local collection prices to export yards stand at €260-267/mt, but, with a possible increase of scrap flows, those prices may lose strength.
Looking at the overall economic situation in Germany, pessimism remains. Summer holidays and holidays for Pfingstmontag (June 7-10) are approaching, and since the situation in the automotive and manufacturing sectors is not brilliant, they may decide to take longer holidays.
At the same time, though, German steelmaker Thyssenkrupp has announced that it has reached an agreement in principle with the domestic industrial union of metalworkers IG Metall regarding the company’s upcoming restructuring. According to the agreement, the company will reduce its production capacity to 8.7-9 million mt, the green transformation will continue and the Eichen plant will not be immediately closed, but will be optimized in the short term.
Moreover, Feralpi Sthal will commission a new rolling mill in Riesa today, May 15. It will be the first plant in Germany dedicated to spoolers production, and the first in the world to generate coils weighing up to eight metric tons.
To conclude, the market has not confirmed or denied the possible closures for May and June that SteelOrbis had anticipated in its previous report.