Davis Index’s monthly German ferrous consumer scrap indices declined by €2-16/mt ($3-25/mt), depending on grade and location, following the conclusion of mill-yard negotiations in July.
Regional developments played out across Germany’s ferrous scrap market this month, with various internal and external factors influencing pricing dynamics by varying degrees.
East Germany witnessed the heaviest declines of €10-16/mt, depending on grade, this month, as increased ferrous scrap availability in neighboring Poland resulted in intensified competition with local dealers to supply eastern German steel mills.
In southern Germany, price falls were more muted at €2-8/mt, depending on grade, over the same period, given that Italian ferrous scrap collection and generation rates have suffered as a result of previous lockdown measures, creating a robust appetite for German imports.
North German ferrous scrap prices witnessed declines in the middle of the overall range at €5-10/mt, with domestic consumption not recovering sufficiently to support the market, while benchmarks have also partially tracked developments at EU docks selling on to Turkey.
Domestic construction activity has continued to be a saving grace for German steel producers compared with the impact from decimated automobile production, despite a recent recovery in sales in the latter since the easing of lockdown measures.
The types of finished steel products produced by German steel mills will likely dictate the length of their autumn “scheduled” outages in August. Those producing flat steel could “break” for up to five weeks, while those making construction steel may only stop for as little as a week.
North, south, and west German obsolete ferrous scrap grades of Sorte 1 (E1) dropped by €2-9/mt to €180-204/mt delivered to mill, Sorte 3 (E3) declined by €7/mt to €196-203/mt delivered, and Sorte 4 (E40) fell by €8-9/mt to €199/mt delivered.
Davis Index’s new low residual ferrous scrap indices for north, south, and west German Sorte 2 (E2) and Sorte 8 (E8) decreased by €5-8/mt and €4-10/mt to €200-203/mt delivered to mill and €203-214/mt delivered, respectively.
East German monthly ferrous scrap indices declined by €10-16/mt for Sorte 1 (E1) to €187/mt delivered to mill, Sorte 2 (E2) to €207/mt delivered, Sorte 3 (E3) to €210/mt delivered, Sorte 4 (E40) to €212/mt delivered, Sorte 5 (E5) to €172/mt delivered, and Sorte 8 (E8) to €213/mt delivered.
(€1 = $1.14)