As anticipated in last week’s SteelOrbis report, German mills’ negotiations for September scrap purchases have been concluded this week, marking an average drop of €10/mt in price. Scrap supply in the local market seems good overall, but mills have very little need for scrap, which is one of the reasons for the price drop.
The finished steel segment in Germany remains weak, and the industry seems currently more focused on social and institutional issues rather than on steel production. In the last few weeks, in fact, several government representatives and associations related to the steel segment have been speaking up with regard to various themes, such as the CBAM, the ETS, EU safeguard measures and energy costs.
In the meantime, German mills have reduced their scrap purchase volumes further, which are now standing at around 60 percent of the usual quantities. “It was very hard to conclude sales this month. The market [in Germany] is not in a good shape” a scrap supplier to several mills in Germany stated, adding that logistics continues to be an issue and deliveries by train or truck are more expensive than ever.
The overall market sentiment remains on the low side, and some sources already report expectations for a further scrap price drop in October. Another factor that needs to be considered is that, with lower requests on the export side, scrap volumes are accumulating in the local market, where demand is unable to absorb them.