Drought "disastrous" for German steel scrap logistics

Scrap merchants are waiting eagerly for an end to the dry weather.
22.10.2018 − 

Many a scrap merchant in Germany can be found with an eye to the sky at the moment. "Everyone is waiting for it to rain,” one market player said. The ongoing drought in Germany is sending river levels lower and lower – with severe ramifications for all scrap businesses, which usually arrange the transport the majority of their product via the country’s inland waterways. While vessels could generally be loaded with around 50 per cent of the usual amount in September, shipments from some locations are impossible right now.

"A few scrapyards in the south have not been able to have any ships leave for six weeks now,” one merchant said. Attempts were being made to switch to rail and road, often with only modest success: "I ordered 40 wagons, but only got about a third of them.” At the same time, freight costs have rapidly doubled or tripled so a lot of scrap is being stored temporarily. Some contracts for delivery in July and August had yet to be completed.

The transport problems caused be the weather are posing challenges for prices on the scrap market as the degree to which scrap merchants and steel mills are affected by the drought varies widely, depending on location. "The laws of gravity have been suspended. The specific logistical conditions are the only factor influencing prices. Steel mills’ prices have not been shaken,” one source said, trying to assess the situation.

The full market report including the price changes in October appears in the next issue of EUWID Recycling and Waste Management on 31 October 2018. Online subscribers can already access the report here: EUWID Ferrous Scrap Market Report for Germany

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