The local German scrap market has showed different trends this week, while monthly scrap purchase negotiations by mills are still ongoing. There are no major changes in the market fundamentals, but low water levels in the Rhine are making scrap deliveries more difficult and transportation costs have increased.
The dry winter in Germany has caused a reduction in the water levels of the Rhine, making cheaper scrap deliveries by boat almost impossible. Hence, scrap suppliers have had to switch to the more expensive deliveries by truck. According to one source, inland freight costs have risen from the previous €11-12/mt to €30/mt. “Most scrap dealers located near the Rhine are currently reducing their [collection] prices due to the extremely low water levels and the resulting significant logistical and cost problems,” a local scrap trader commented.
A major steel producer has cut its scrap purchase price by €30/mt. Other areas of the country, however, have seen stable (in the south), or higher prices (in the east), rising by €8-12/mt. “Since April is a short month, the market is trying to find its balance”, a German scrap trader commented. “Mills that went too high in March are now trying to lower their levels, and mills that went too low are increasing their purchase prices to tradable levels,” he explained. Scrap demand from eastern Germany mills is low, and steel producers in western Germany and near the French border are working with short schedules.
Finished steel demand is modest but consistent in the German market, although there is great uncertainty coming from the international market and Trump’s tariffs on imports, which are translating to a general absence of deals both in the finished steel and scrap segments.
The situation will probably become clearer next week, but SteelOrbis believes that German scrap prices will be lower, in line with declines in neighboring countries.
As for exports, collection prices for export yards have declined sharply, shifting from last week’s €310/mt for HMS I/II 80:20 to around €280-285/mt DAP this week. “The euro-dollar [exchange] rate is also not giving the Germans a lot of room for CFR Turkey prices, which will eventually have an impact on the local market” a source said, adding that the sentiment for May is already on the negative side.