Prices on the German steel scrap market rose in February for the fourth month in a row. While the brisk export business was the main price driver in December and January, the latest mark-ups in February were attributed to an uptick in domestic demand combined with ongoing tight supply. However, scrap recyclers and traders currently doubt this upward price trend will continue in March. The German steel industry is still struggling and there are no signs that a lasting upswing is on the horizon, EUWID was told.
Nevertheless, domestic steel producers had surprisingly good demand for scrap in February. Low inventory levels and worries about further rises in export prices prompted mills to enter the market early in the month. "Everyone had demand and they all wanted to buy,” traders unanimously reported. However, one respondent pointed out that the volumes purchased by steel mills in many cases were still well below the levels of previous years.
This is, of course, also due to the limited scrap availability. Owing to the slowdown in the construction industry and the lack of new investments in plants and machinery, the arisings of demolition, industrial and mixed ferrous scrap have dropped off substantially.
The same is true for new scrap. Particularly in the machine-building sector as well as the automotive industry and its suppliers, production is faltering and short-time work is widespread. "At some places, the production lines are more often idled than running," commented one scrap trader. Yet some recyclers also reported surprisingly high amounts of production scrap, illustrating how uneven the market development can be.
Read the full monthly report on the ferrous scrap market in Germany and access the current prices and graphing tools here:
