Steel scrap arisings plummet in Germany
as economy grinds to a halt

Trading volumes declined by around 50 per cent.
23.04.2020 − 

"What's next?" This is the million dollar question for players in the German ferrous scrap market and in all other industry sectors. A month after the Covid-19 outbreak was declared a pandemic, there is still no one who knows the answer. All market players are proceeding cautiously, taking it one day at a time, reported EUWID respondents in the monthly survey of the German steel scrap market.

The companies are trying, as best they can, to adjust to the "new normal”. Work processes have been adapted to comply with the stricter labour and hygiene standards. Personal contact within businesses has been reduced to a minimum, with employees working from home or in shifts, or on short-time work. Contact with customers during scrap purchases and sales has also been minimised. Yet, there is not that much material to move at the moment anyway. "There is simply no scrap anymore,” commented one market participant.

Especially at the industrial operations which are usually large-scale generators of scrap, there was a "yawning void”. The volumes of new scrap arisings are "basically zero” in some cases, said one trader, noting there have been widespread production shutdowns at automotive manufacturers and suppliers since last month. Volumes of old scrap arisings were only marginally better. With the coronavirus crisis making scrap collections more difficult, local authorities' recycling centres being closed and the prospect of a dramatic price collapse, there were multiple factors severely limiting material inflows here as well. Respondents say that volumes are down by around 50 to 70 per cent across all scrap grades in April. This echoes the results of a survey recently released by the steel recyclers' industry association BDSV.

Price trend not as negative as initially feared in March

Prices on the steel scrap market in Germany did not ultimately fall as sharply as initially expected. Although steel mills had been calling for price reductions of €50-60 per tonne shortly after the March deals were signed, these "price fantasies” were soon dispelled, according to traders. In particular, rising Turkish demand supported scrap prices and limited the decrease compared to March prices in Germany.

The full report on the steel scrap market in Germany will appear in the next print and e-paper issue of EUWID Recycling & Waste Management (9/2020) out on 29 April.

Online subscribers can access the report immediately here: Steel Scrap Germany

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