German ferrous scrap market kicks off year with sharp downturn

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22.01.2019 − 

There was enormous pressure on ferrous scrap prices at the beginning of the year. Although price declines had been expected, steel scrap traders were occasionally taken aback by the size of the mark-downs. The trend was set off partly by a considerable decline in export prices. Turkey’s steel industry, the world’s largest scrap importer, is struggling with a subdued domestic market, difficulties with international sales due to the low EU import quotas and competition from inexpensive Chinese steel. "The prices for Turkish exports totally wrecked domestic prices," said a merchant.

Another contributing factor was that some German and Italian steel mills still had good supplies of feed material after their holiday downtimes. As a result, demand for scrap this January was lower than in other years, explained scrap traders. In addition, Kehl-based steel producer Badische Stahlwerke (BSW) is planning to replace a continuous casting plant once it has completed its usual major wintertime maintenance shutdown. The mill therefore plans to operate with only one line in the coming weeks and has purchased barely any scrap. According to traders, other German steel mills have also only been operating with one furnace lately, causing scrap demand to be lower.

The full ferrous scrap market report for Germany is available to our premium subscribers immediately: Ferrous scrap market report January. E-Paper subscribers can read it as of 14:00 on 23 January.

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