Where the steel scrap market is headed is a perennial question for merchants in Germany, but it is one that is harder than ever to answer at the moment. Developments in May again left recyclers with little reason for optimism regarding the remainder of the year.
Demand for scrap from German steel mills was better than expected, but steelmakers still had what are now the usual complaints about thin order books and steel prices being too low.
The fact that ferrous scrap remains in short supply explains why scrap prices still did not come under considerable pressure this month. Merchants anticipate that the tight supply could lead to another lateral movement in prices in June. EUWID’s monthly survey revealed that the mood among steel manufacturers and scrap merchants alike was very gloomy. Market players believed that many steel mills were in the red at the moment. Either steel prices had to rise, or scrap prices had to fall for them to break even or turn a profit. However, neither appears to be possible at the moment.
