European scrap prices mostly stable in a balanced market

European scrap prices were mostly unchanged m/m in February because weak demand was relatively balanced by limited supply. European scrap prices currently range between €355 – 385/t, depending on the grade and country.

Market participants state that European scrap orders are slow because demand for finished steel products has underwhelmed in the New Year. In the longs market, buyers are mainly purchasing on an as-needed basis only while steel sheet demand was supported by seasonal restocking activity. At the same time, domestic scrap prices fell as export demand for German scrap in Pakistan and India decreased. This was partly due to higher freight rates as disruptions in the Red Sea led to cancellation of some shipments.

Meanwhile, scrap supply was down significantly by between 35–40% compared to two years ago, as per some market participants. Scrap collection rates slowed due to poor weather in combination with the holiday period in December and January. Some scrap sellers also chose to hold off on sales over recent months because of poor margins as costs have risen. For instance, truck tolls rates increased by 84% since December 1, 2023 in Germany. Moreover, scrap generation from industrial sources lowered, and German suppliers specifically mention that they received less material from some automotive producers recently.

German scrap demand was particularly weak due to reduced steel production, while demand was slightly better in other countries, including Poland and the Czech Republic. This caused domestic prices in Western Europe to weaken over import offer prices.

In the Turkish scrap market, import prices were volatile but remain at a relatively elevated level since early December 2023, compared to May to June period of 2023. CRU’s latest price assessment for HMS 1/2 80:20 was $419/t CFR, down $2/t w/w and $4/t m/m. Buyers continued to restock material but were cautious as real demand for finished steel products did not pick up significantly in the new year while supply stayed constrained.

Meanwhile, the price trend for Russian domestic scrap changed direction after decreasing for two consecutive months since November. This price rose sharply since mid-January across all regions as steelmakers returned to restocking, following the end of traditionally long January holidays. Meanwhile, material supply remained reduced seasonally as harsh weather conditions kept collection rates low. At the same time, several large steelmakers had sufficient stocks and paused further price revisions in February, after raising prices sharply in the second half of January.

Scrap export prices for the CIS region were supported by the trend in the Turkish import market observed since the end of last year. Price tags slightly fluctuated over the past month but mostly remained elevated due to overall low scrap supply availability in the December-February period. Overseas shipments were reduced as new quotas were being distributed at the start of 2024, while the holiday period also constrained business activity. CRU continues to assess only indicative rates for Black Sea export prices for scrap on the FOB basis in its Global Steel Trade Service as scrap shipments from the Southern ports of Russia remain prohibited.