German steel scrap market ends 2020 with unparalleled rally

Lively exports drove the ferrous scrap prices
markedly higher in December.
21.12.2020 − 

"Crazy,” "madness”, "a joke” were just a few of the words used by merchants to try to describe recent price developments on Germany’s ferrous scrap market in interviews with EUWID. It is not unusual for prices to climb towards year’s end. Yet, the price rally that the market encountered this December was unprecedented in many respects.

"'Totally nuts' is the understatement of the year,” one insider said, summing up the leap in prices. Buyers had to hand over an average of €30-40 per tonne more in Germany, but this increase was still lagging well behind developments on the international market with a view to the trend in export prices.

"Turkey needs and is buying massive amounts of scrap, sometimes for delivery as soon as February,” one merchant stated. Continuing the trend seen in months past, Turkish steelmakers were mainly benefiting from the economic boom in China. The People’s Republic is consuming so much steel that Turkey enjoys excellent sales opportunities amidst soaring steel prices both in China and in other parts of Asia that China is hardly serving anymore because of strong domestic demand.

Strong demand for steel and scrap coincides with strained supply

Demand for steel was strong again now that automotive companies’ order books were taking a sharp turn for the better. However, this steel had to be made first. Since steel mills had also tried to minimise their inventories for operating capital over the summer months when ordering was low because of the pandemic reasons, demand for scrap from these steel mills was now extremely high. "Buyers are snatching scrap out of our hands,” one merchant said. However, this lively demand for scrap is coinciding with relatively scant supply.

The full report on the ferrous scrap market in Germany will appear in the next print and e-paper issues of EUWID Recycling & Waste Management (01/2021) out on 13 January. Online subscribers can access the report immediately here:

Steel scrap Germany



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