Local German scrap prices stable to low in December amid slow market

After the last BDSV publication around November 20, the final week of the month was characterized by an absence of changes and a silent market. The only relevant news was that ThyssenKrupp anticipated 11,000 job cuts by 2030 and to reduce their capacity from 11.5 million mt to 8.5-9.0 million mt, as SteelOrbis reported on November 26. “It is a surprise for us too,” a source commented, adding, “They actually wanted to go public with this in the first quarter of 2025. The fact that they are already doing this now indicates that they want to exert pressure on politicians before the elections.” As SteelOrbis previously stated, in Germany is going to early elections in February 2025.

During the first week of December, the situation remained mostly unchanged compared to the previous week, with strikes in the automotive segment worsening the general mood. According to Reuters, on December 2 workers at nine Volkswagen plants started a strike that halted assembly lines. They were protesting against the company’s demand for a 10 percent wage cut and threatened site closures in Germany, citing the widespread crisis in the European car industry caused by high production costs, weak demand and strong competitiveness from China. On Friday, December 21, however, Reuters reported that Volkswagen and the workers’ unions had reached a deal, according to which there would be no immediate plant closures and no 10 percent reduction in wages.

The second week of the month was the scene of an unexpected event. On Sunday, December 8, a cargo ship carrying 1,500 mt of scrap - reportedly belonging to the German scrap trader Theo Steil - crashed into a lock gate on its way to Luxembourg, completely disrupting the Moselle river water way until the end of the repair works, which will last until at least March 2025. Before the accident, ArcelorMittal Luxembourg had lowered its scrap purchase prices by €20/mt for all grades except E40, which it had lowered by €25/mt. German scrap suppliers, however, have not accepted these reductions for January purchases yet. As a result, ArcelorMittal may correct its prices as it will only be able to receive the material by truck or by wagon, which are more expensive transport methods compared to water ways. According to sources, this incident will also have consequences for other players in the market, specifically German steelmakers Dillinger Huttenwerke, Georgsmarienhutte Holding and Saarstahl.

Some light optimism in the local German scrap market was seen during the third week of December, probably due to the rises in export prices to Turkey which were at $349.5/mt CFR for HMS I/II 80:20 in the last deal reported. Nonetheless, some sources claimed reductions from €7/mt to €20/mt on purchase prices for January deliveries depending on the grade and on the mill, whereas others report no changes.

SteelOrbis, however, believes that these new rises seen in the export market to Turkey are just an end-of-year spark and will not last long. If demand from Turkey keeps increasing, prices in the local German scrap market will have to follow.

According to the latest data provided by the Bundesvereinigung Deutscher Stahlrecycling-und Entsorgungsunternehmen e.V, in the first 20 days of November, scrap prices moved down by €0.6-8.5/mt month on month. On year-on-year basis, scrap prices indicated declines ranging from €21.3/mt to €59.8/mt.

The prices are provided by Bundesvereinigung Deutscher Stahlrecycling-und Entsorgungsunternehmen e.V. are average prices for domestic transactions across Germany in the first 20 days of the given month.

Specifications:

E1 - Old steel scrap: thickness ≥ 4 mm, maximum dimensions 1,5 m x 0,5 m x 0,5 m
E2/E8 - New steel scrap: maximum dimensions 1,5 m x 0,5 m x 0,5 m
E3 - Heavy old steel scrap: thickness ≥ 6 mm, maximum dimensions 1,5 m x 0,5 m x 0,5 m
E40 - Shredded scrap: excluding incinerator steel scrap and collection scrap; density ≥ 1,1 mt/m3, Fe ≥ 92%
E5M - Turnings: excluding iron and automatic steel turnings