August has turned out to be a highly unusual month of trading for German ferrous scrap recyclers. A downturn in steel mills’ demand for scrap had been expected during the summer holidays and the annual maintenance season. But when in many regions material was sought at prices that were unacceptable to merchants, if it was sought there at all, scrap recyclers were caught off guard. It was only exports to Turkey that offered good sales opportunities at better prices – although only a handful of merchants could capitalise on these alternatives to the European market. Record low river levels and the decision to prioritise fuel transports mean that shipping scrap by water is almost impossible in Germany at the moment. At the same time, freight rates have skyrocketed, widening the gap between ex-station and free-delivered domestic prices significantly at times and throwing the price structure into turmoil.
"I’ve never experienced a summer lull like this,” one market participant said, talking about extremely low trading volumes. Merchants that generally served a large number of steel producers in Germany and neighbouring countries could count themselves lucky if they could find at least one steel mill willing to make purchases in August. And even in these cases, these purchases often only involved small volumes and were concluded only to maintain trading relationships....
