Coronavirus crisis causing major uncertainty for steel scrap traders in Germany

After mark-ups at the start of March, steel scrap prices
are now in free fall due to the coronavirus crisis
24.03.2020 − 

At the beginning of the month, it still looked like business might proceed almost normally for steel scrap recyclers and traders and slight price mark-ups were on the horizon. However, there was a complete reversal in sentiment at the end of the second week of March. With the ever-expanding spread of the coronavirus and the increasingly strict containment measures imposed by governments, there are fears that the business may collapse entirely. Steel-processing companies are halting production and cancelling orders.

Steel producers sometimes no longer feel committed to their contracts with scrap dealers and are cancelling them or refusing to accept material. The prices currently being paid by steel mills are sometimes far below the levels seen in February. Scrap dealers cannot currently say at which price the volumes will ultimately change hands and be invoiced. "We really ought to suspend the market price in March,” one trader told EUWID.

While reportedly some volumes were delivered and are being delivered at the agreed prices this month to steel mills, sales have slowed down significantly in parts of Germany. There are reports that steel mills are suspending contracts and, in Italy, contracts have even been cancelled entirely, EUWID was told.

The full report on the steel scrap market in Germany appears in EUWID Recycling & Waste Management 07/2020 out 1 April 2020.

Our online subscribers can access the report immediately here.

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