At the beginning of the month, some steel mills increased their prices by EUR 25 - 30 per tonne, depending on scrap type and region, whereas others did not follow suit. However, the demand did not reach the expected high level on which some traders had speculated. The sheer quantity of scrap available on the market, which resulted as a consequence of unfulfilled expectancy, led to an increase in delivery willingness.

Some mills which suffered considerably under this development reacted quickly with shutdowns. Those market participants who had not managed to tie up contracts at the beginning of September were forced to accept unchanged or reduced prices in the weeks following. However, the expected high demand, limited supplies and the corresponding rise in prices for the month of September were not completely unfounded. Crude steel production is increasing slowly; some furnaces are already or are about to be re-fired and in addition consumer demand traditionally increases after the summer vacation period. However, it had not been taken into consideration that as a result of the slight economic recovery quantities of industrial scrap had increased in some sectors during the summer months.

Exemplary for this in Germany, were the automotive industry and the automotive component industry which benefited from the German government’s scrappage schemes. The quantity of pre-shredding material showed a marked increase for the same reason. In addition to this, it appears that up to the beginning of September several large scrap dealers had cleared their stocks for financial reasons, amongst others, and on the other side, some steel manufacturers kept their stocks to a minimum because of the end of their financial year. By the end of the first trading week, the trade was already forced to admit that the expected turnover for September was not going to be realized. As usual in such a situation, there are often multiple offers on the same scrap quantities making it rather difficult to assess accurately the quantities of available scrap on the market. The mood on the scrap market changed as a result of the unfulfilled expectancy and those who in the middle of August had prophesied large price increases are now talking of a marked price reduction in October.

For further information, please visit www.sekundaer-rohstoffe.com/html/schrottmarkt.html. You will find the link at the end of the German report.

Quelle: bvse

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