At the end of monthly negotiations, the local German scrap market showed a stable to slightly upward movement depending on the region and the mill. Most producers have chosen to keep their purchase prices unchanged for June round, and some slight price increases by €5/mt were recorded in the northern, eastern and south-western parts of Germany.
The other regions marked stable prices, with an exception for one mill in the west which had almost no need to buy and reduced its scrap purchase prices by €15/mt. Some producers increased their import volumes, but the overall scrap demand remained sluggish in June, probably due to a reduction in finished steel demand, to the Pentecost holiday (June 6-10), the Corpus Domini holiday (June 19) in some German regions, and the summer holidays approaching everywhere in Europe. Moreover, ArcelorMittal Eisenhüttenstadt will implement annual scheduled repair work on blast furnace 5A, idling its operations from June 22 until June 27-28.
“It was hard to close contracts”, a local German scrap trader reported. “And it was not entirely about prices, it’s just that producers don’t want to buy”, he said. “I expect July to be stable, and hopefully they [mills] will close the month on low stocks, so that they will need to buy again in September”.
It is also true that, in the long run, more and more steel mills will try to become self-sufficient in scrap supply, as the Salzgitter-Volvo partnership demonstrates, thus lowering scrap prices by partially reducing their demand, but according to market players it is unlikely that steelmakers can produce enough scrap to entirely compensate for their needs.
On the export side, scrap collection prices to export yards in Germany are now standing at €250-255/mt DAP, slightly upwards in the higher end of the range for HMS I/II 80:20, whereas in Poland, HMS I reference scrap collection prices to export yards have been reported in a range of €250-270/mt DAP.