As SteelOrbis foresaw in last week's report, the beginning of July has turned out to be very slow in the local scrap market in Germany. Contrary to previous expectations of stability, however, rumors of a possible drop in mills’ purchase prices are already emerging in the market.
Mills have not yet announced new prices for July contracts, but, based on market information, a mill in northeastern Germany is thinking of lowering its scrap purchase prices by €10-15/mt. An Austrian mill has already announced reductions of €10/mt for purchases of new scrap for the month of July, while it has postponed its decision on purchases of old scrap. This information makes SteelOrbis believe that a similar decline may also occur in southern Germany.
Scrap availability continues to be low, but, from their end, producers are not showing strong buying interest. "No one wants to buy or sell, and many [scrap collectors] are already on vacation," a German-based scrap trader commented.
In addition, after a slight recovery, water levels in the Rhine are falling again due to high temperatures, which suggests a new increase in inland water freight rates.
As for the export market, although Turkish steel mills have shown greater interest in scrap purchases in recent days, price levels remain mostly stable, contrary to exporters' desires for an increase. In addition, with the euro-dollar exchange rate at €1 = $1.18, its highest level in two years, exports are penalized. HMS I/II 80:20 scrap collection prices to export yards have been reported at €250-255/mt DAP this week.
