Steel scrap prices in Germany peak after months of market turbulence

Cranes lift ferrous scrap from heaps at a scrap metal yard
Ferrous scrap prices have moved sideways in Germany
21.07.2021 − 

The situation on the ferrous scrap market in Germany in July was broadly unchanged compared with the previous month. Amidst tight scrap supplies and strong demand, especially for new scrap, prices remained at record highs. As factories will soon shut down for summertime holidays if they hadn't already, scrap traders do not expect any major changes in market conditions in August, either. However, the current regional price differences between northern and southern Germany are expected to narrow. No new market momentum is expected until September, when all manufacturing facilities will be up and running again.

After the price leap in June, the mood on the ferrous scrap market was initially euphoric heading into July. Steel producers in Italy and Luxembourg were very keen to buy scrap, which provided another boost to prices, especially in southern and western Germany. By contrast, mills in northern and eastern Germany were more reticent, as summer holidays there typically start earlier. In the north, the weak exports to Turkey were putting increasing pressure on old scrap prices as the month progressed. 

Arisings of new scrap still hampered by semiconductor shortages

The sustained strong demand for higher-quality scrap grades continues to shape the market. At the same time, supplies of new scrap are still very limited. The shortages of electronic chips and other components continue to throttle production at carmakers and their suppliers. Recently, for example, Daimler had to halt the production of several models in Sindelfingen (Baden-Württemberg) because of the bottlenecks. The amount of scrap currently being generated at industrial facilities is therefore low.

The scrap recyclers surveyed by EUWID do not believe there will be further price increases in August. "The peak has been reached,” commented one respondent. Stable or slightly weakening prices are considered likely. Scrap traders do not expect to have any more clarity on the market developments until September. "That will be the interesting month,” said one respondent.

The full report on the steel scrap market in Germany appears in the print and e-paper issues of EUWID Recycling & Waste Management (15/2021), published on 28 July. Online subscribers can access the report immediately here:

Steel scrap in Germany

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