Posted on 12 Nov 2019
The trend of rising scrap prices in the Benelux, which has continued for over a month, gained momentum last week.
Scrap collection prices, which were at €185-190/tonne delivered at the beginning of last week, have surged after a yard suddenly increased its price to €195. Because European scrap yards are in need of collecting material they have already sold, other yards have further increased prices, meaning European collection prices have risen almost €20/t in one week. The highest level paid by a yard reached €207.5/t delivered as a result of tough competition among European merchants to procure material.
As 11 November is Remembrance Day holiday in some EU countries, there has been no change this week in scrap collection prices, which stand in most yards at €200-205/t delivered for HMS 1/2 80:20.
A European scrap yard tells Kallanish: “Limited availability of scrap has triggered the competition among scrap yards in Europe. In a week they thus surged to over €205/t delivered. To be able to meet the cost of doing business, export prices have to be at $260/t-270 cfr Turkey levels.”
On the export market, US- and Baltic-origin material price increases have halted, while European scrap increased by a further $4/t on-week last week in largest export destination Turkey. As a result, European HMS 1/2 scrap levels have almost reached US and Baltic scrap levels, which are at $259-260/t cfr Turkey.
In the latest European transactions, a Turkish mill bought HMS 1/2 75:25 at $255/t cfr, while another mill bought a cargo consisting of HMS 75:25 and bonus grade at the same quantities at an average price of $261/t cfr. The HMS 1/2 80:20 price corresponds to $258-258.5/t cfr for European scrap.
European scrap prices are unlikely to reach $265-270/t cfr Turkey this week. However, if European yards’ competition to collect scrap continues, Benelux scrap prices are expected to record further rises as a result of the urgent need for collecting the sold material.
