Towards the end of March and beginning of April, Turkish steel producers resumed the purchasing activities they had paused during Ramadan, driving a significant upturn in the steel scrap export business. The prices paid by European exporters for the export grade HMS 1/2 including delivery to the ARAG seaports (Amsterdam, Rotterdam, Antwerp and Ghent) surged by €25-30 per tonne compared with mid-March.
This also created upward price pressure for steel mills in Germany and neighbouring countries. Steel producers had originally intended to trim prices in April or keep them steady at the previous month’s level, but they were ultimately forced to raise their prices too, traders told EUWID.
However, the spike in transport costs resulting from the energy price shock wiped out any additional profits for recyclers. Respondents complain of shrinking margins. "Transport costs are absolutely destroying margins," commented one trader. Since the middle of March, hauliers have raised their prices by another 7-10 per cent, meaning the cumulative increase since the beginning of the Iran war is 15-20 per cent, EUWID was told. Freight costs for shipping on inland waterways have also increased, insiders say.
However, in most cases, the higher costs can only be passed along via scrap prices. It was difficult to get customers to agree to separate special transport surcharges or fuel price adjustment clauses, explained one recycler.
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