The last couple of weeks have remained very quiet in the local Polish scrap market. The summer lull in most European countries has led to an overall deceleration of business activities, and market talk has been focusing on current discussions about a possible ban on scrap exports from the country.
According to local Polish media, and as several market sources confirmed, steel associations and the Polish government have been intensifying dialogues about a possible ban on scrap exports these last few weeks. “The [Polish] government has been talking about this for three years now, but there are no official decisions about it”, a representative of a Polish mill stated. A major scrap exporter in Poland declared he is in the front line fighting against any possible ban. “Scrap availability has never been the problem,” he said. “The problem is that steel producers lack orders and they are experiencing high energy costs. It’s not about scrap. They are trying to shift the focus to something they can control [i.e., the scrap price]”, the source claimed.
In other words, scrap demand from mills in Poland is low because steel demand is low, and banning scrap exports to achieve higher scrap availability in the local market will not help steel demand - it will only cut scrap prices on the cost side for mills.
In the meantime, since there were no major changes in the market fundamentals. Local scrap prices in Poland have remained more or less stable compared to the latest levels recorded, being at €254-264/mt for HMS I equivalent, €237-245/mt for HMS II equivalent and €267-268/mt for bonus scrap. Collection prices for HMS I at export yards have been reported at €255-260/mt, unchanged week on week.
“It is likely that mills will decrease their scrap purchase prices by around €10-15/mt, as it is the general tendency in Europe, but we will know better around August 10”, a local scrap trader commented.