The short-lived upswing during the summer months was reversed during October. As a result, against their normal practice, some mills even delayed finalizing contracts due to the pessimistic mood on the market which became apparent around the middle of the month.

The scrap trades' marked delivery willingness, which despite considerable price reductions did not wane, plus the fact that some mills did not reach the expected order levels led to an average price reduction of approx. EUR 30 - 45 per tonne, depending on the finalization date, region and scrap grade. For subsequent deliveries during the second half of the month a markdown of up to EUR 55 per tonne had to be accepted. As in previous months the mills concentrated on obsolete scrap resulting in a considerable glut of industrial scrap in some regions. Although the average capacity utilization in German mills is approximately 70%, there are large discrepancies between the different mill types. Rebar sales volume especially left a lot to be desired, resulting in a much lower demand for scrap from rebar mills than had originally been expected by the trade.

During October scrap sales proved to be difficult in some regions due to a lack of export possibilities. The mood on the market worsened further as many mills announced premature suspension, which could be put down partly to the increasingly poor order situation but also to the trade’s delivery willingness. The fact that some traders also reduced stock levels increased the pressure on the failing market. The mills had attempted to use the ‘summer high’ on the market to push up prices on their new steel, but as domestic and international markets did not develop as expected, some mills tried to stimulate the market by reducing prices. This resulted in falling scrap prices which then prompted steel consumers to demand lower prices on new steel; the downward spiral was encouraged as all parties involved waited for the lowest scrap or new steel prices.

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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