As anticipated in last week’s report, scrap purchase prices in the local German market marked have an average rise of €15/mt, and the quantities bought by mills have declined in volume. Moreover, due to the strength of the euro against the dollar, scrap exports have been weaker than expected.
In terms of scrap supply, inflows saw a slight improvement due to a modest revival of demolitions, which may help increase the availability of old scrap. In the meantime, though, as one source commented, “Scrap flow is enough to cover current demand but not enough to allow further increases in purchase prices.”
Scrap prices and needs vary based on the region and on the mill, but we can say that in the northern part of Germany scrap purchase prices from mills rose by an average of €15/mt, and delivered quantities were halved in some cases. In the eastern part of the country, markups were higher, especially for E1 and E5 scrap, which rose by up to €18-20/mt. There is talk about a €30/mt increase in the west of the country, but apparently the mill who bought at the new level entered the market too early last month, so now they have to adjust to the market price. The purchased volume, however, seems to be low. In the southwest, purchase prices rose by €15/mt with peaks up to €20/mt. Finally, in southern Germany, prices increased by €15/mt.
Generally speaking, the price increases are in line with the overall rising trend seen in all European countries, but sources are hoping that the peak has been reached, and that April will be a stable month in terms of scrap prices.
As for exports, on March 18 sales prices to export yards rebounded to €310/mt DAP for HMS I/II 80:20 scrap, up by €5-7/mt week on week. Bids for bonus grades were at €332/mt DAP, meaning that the price gap between the lower and higher grades is widening in the EU because they are competing with lower bonus scrap flows coming from the US.