Steel scrap suppliers in Germany increasingly calling for price mark-ups

Rising export prices widen the price gap between
northern and southern Germany
22.11.2020 − 

The mood in the market for steel and ferrous scrap is improving. Many steel-processing industries, especially the automotive sector, are ramping up production again after the lockdown-related slump in the first half of the year. As a result, demand for steel is rising and production at the steel mills is increasing as well. The majority of respondents in the monthly EUWID market survey in Germany are therefore becoming more optimistic about the future. “I expect a strong first quarter of 2021,” said one trader.

Now that order books at the steel producers are filling up again, demand for scrap as a raw material is also increasing. As in the previous month, steel mills were keen to buy in November, especially since their inventory levels are rather low following several months of market uncertainty, traders say.

However, steel mills vigorously rebuffed any attempts by traders to increase prices. “The negotiations were quick and painful,” one market participant told EUWID. The steel industry was particularly successful in keeping prices unchanged in the south of Germany. Given their proximity to the Italian scrap market, where prices are still lagging, scrap dealers in this region had trouble implementing mark-ups. Only in a few instances were sellers able to negotiate a few euros more for certain scrap grades.

Northern German steel mills must
compete with sharply rising export prices

By contrast, steel mills in the north of Germany had much less room to negotiate and scrap prices in this region are now significantly higher than in the south. One reason for the upward price pressure was a recent sharp uptick in export prices; domestic steel mills must be competitive if they wish to source material. The export business has been driven by strong scrap demand from Turkey, where buyers are prepared to pay ever-higher dollar amounts for ferrous scrap, despite the eroding value of the Turkish lira.

You can read the full market report in the print and e-paper editions of EUWID Recycling & Waste Management 24/2020, out 25 November. Premium subscribers can access the market report right away:

Steel Scrap Germany

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