Bearish sentiment has emerged in the local scrap market in Poland as negotiations for the July buying cycle begin. Although it is too early to say, several market players have already expressed expectations of a drop of €5-10/mt in scrap prices.
In the local market, current prices are observed at €256-270/mt DAP for HMS I equivalent grade scrap, at around €245/mt DAP for HMS II equivalent grade scrap and around €268-273/mt DAP for bonus scrap. According to one source, one of the main Polish mills is interrupting scrap collection for the month of July as it already holds sufficiently high stocks, but it is not planning production stoppages in the summer period. "Producers in Poland generally carry out maintenance shutdowns between September and November, so I expect a drop in [scrap] consumption between now and the end of August," a representative of a Polish mill commented.
The decrease in scrap consumption is also attributable to the summer season, when commercial activities in Poland, just like anywhere else in Europe, experience a traditional lull.
As for the export market, high freight rates and the euro-zloty exchange rate remain unfavorable and are causing reduced scrap flows to exit the country. According to SteelOrbis’ latest survey, the collection prices from export yards are standing at around €255/mt DAP for HMS I.
€1 = PLN 4.25 (July 3)