According to several players in the local German scrap market, scrap purchase prices from mills at the end of April negotiations have consolidated at higher levels by around €5-10/mt compared to March in some regions, whereas they have remained unchanged in some others.
This shows that the European scrap market continues to outline an extremely heterogeneous scenario, with market trends no longer being characterized by a common price line. Steel producers are more and more focusing on their punctual needs and are developing their strategies day by day.
“Some consumers reported an increasingly inventory-oriented purchasing policy. Many uncertainties, not least the geopolitical tensions in the Middle East and the associated rapidly rising energy and freight costs, are leading to a risk-minimization approach, part of which is a strictly managed inventory policy”, a source at a local German association reported.
More precisely, scrap prices in the northern part of Germany have risen on average by €5-10/mt. In the east, scrap purchases have been concluded either at unchanged prices or at levels €5-10/mt higher, and the same happened in the west. In the south and southwest of Germany, along with the Saar region, scrap demand has been lower and scrap purchases have been concluded either at unchanged prices or with increases of €5/mt.
This firmer trend has been mainly driven by a general scrap shortage, which is being observed not only in Germany but also in other European countries, and by higher demand from export yards, whose collection prices are standing at around €300/mt DAP for HMS I/II 80:20, according to sources.
However, the main issue among market players at the moment is not scrap prices themselves, but price increases in energy and fuel costs that are being worsened by the escalating conflict in the Middle East. In a press release published by BVSE and other German associations and shared by SteelOrbis this morning, April 21, such associations urge the German federal government to take concrete actions to protect small and medium enterprises (SMEs) from price fluctuations, as they are the most affected by the cost crisis which is not - the association reports - “a naturally occurring event and in the most part can be significantly influenced by political policy”.
In this regard, BVSE and the other associations which have subscribed to the joint statement, are proposing a five-point action plan involving cutting state-imposed costs, safeguarding investments, securing raw materials supply, implementing a moratorium on new burdens and introducing relief measures, and adopting a pragmatic approach to the energy transition.
