July was another month without any major changes on the German ferrous scrap market, even though many steel mills have now started their seasonal downtimes. Scrap supply and demand were generally balanced at a subdued level, which provided support for scrap prices.
Overall, the ongoing severe shortage of scrap slightly outweighs the softening of demand resulting from the sluggish economy and summertime plant shutdowns. Consequently, as in the previous month, steel mills occasionally tacked on a few euros more to their purchase prices.
Traders now expect the summer slump will be most pronounced in August. It remains completely unclear whether autumn will bring the long-expected market upswing, they say.
With the summer shutdowns already underway at some steelworks, there were some strong regional variations in demand for scrap in July. A few mills that had already shut down their furnaces in late June or early July were only purchasing enough material to maintain trading relationships, and prices here were unchanged.
In addition, there was especially weak demand for scrap from Italian mills, although the main holiday season there does not begin until August. Demand from Swiss steel producers was also "very modest" in July, as it had been in June as well, according to traders and recyclers. On the other hand, some mills were still purchasing decent volumes in the first half of July.
Subscribers can access the full market report and the price table and graphing tools here:
