German steel scrap prices continue plunge on weak demand from mills

Ferrous scrap prices tumble again.
22.10.2019 − 

The downward slide in steel scrap prices in Germany continued unchecked in October. For the second month in a row, scrap traders were forced to accept major price cuts. The sinking prices were due to the ongoing slump in scrap demand from steel mills, which are struggling with their own slipping sales owing to the sluggishness in automotive industry, now spreading to other sectors. The scrap traders surveyed by EUWID do not expect the market to improve in the near future. However, most respondents do believe that scrap prices have now bottomed out.

The situation was “no fun altogether”, said one trader, commenting on the latest price cuts . Theoretically, price levels should be irrelevant to traders as long as they can achieve a margin between procurement, processing and sales. But in a falling market it is generally harder to earn money. “Whatever we earned this spring is now depleted again,” reflected one respondent.

For traders, volume flows are far more important than prices. And, as previously reported, these flows were fundamentally disrupted in September (EUWID 20/2019). Nearly every trader surveyed at the time had problems selling material because of the weak demand from steel mills. This situation improved somewhat in October, EUWID was told. Italian customers, who were almost entirely absent from the market in September, were reportedly buying material again. In Germany, too, steel plants were slightly more willing to purchase scrap, although some traders still say they were having major difficulties making sales.

Our online subscribers can access the full report immediately here.

The full report on the steel scrap market in Germany also appears in EUWID Recycling & Waste Management 22/2019 published on 30 October.

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