At the end of July, local scrap prices in the Polish market have shown signs of decline. Summer seasonal factors and the initial weakness of other European markets, as well as the lack of demand from Turkey's import scrap market - and the low price levels - have slowed down both local and export scrap market activity in Poland.
According to the latest data published by IPHGZ, the Polish Metallurgical Chamber of Industry and Commerce, the average scrap purchase price for delivery to yards in July has reached PLN 1,047/mt (approx. €242/mt) for W2 scrap (equivalent to HMS I) and PLN 1,091/mt (approx. €252/mt) for W7 scrap (equivalent to bonus), respectively down by PLN 76/mt (€17.57/mt) and PLN 74/mt (€17.10/mt) compared to June. This represents the second consecutive drop, meaning that scrap prices in Poland have lost on average PLN 109/mt (€25/mt) for W2 grade and PLN 139/mt (€32/mt) for W7 grade in the past two months.
According to sources, one of the main Polish EAF mills has lowered its scrap purchase prices by PLN 100-120/mt this month (€23-27/mt), in line with the choices of most European steel producers. Low finished steel demand, as well as the summer lull and the overall pessimistic sentiment have also influenced price trends in Poland in July.
Even HMS I scrap collection prices have been lowered by around €20/mt compared to the previous level, now standing at €260/mt DAP and with exporters having little intention to conclude sales. “Scrap inflow is very slow, and we are not accepting lower prices,” a source said.
In the past few days, however, Turkey's import scrap market has shown signs of recovery, and scrap prices have registered a little rebound. Steel and scrap prices in general seem to have stopped their decline, and the first signals of a more positive price scenario are emerging.
However, actual changes, if any, will only be seen at the end of the summer season, and market fundamentals will need to support a potential price rebound.
€1 = PLN 4.33
