Fears that scrap prices would fall even further for November’s tonnages and deliveries have been allayed. Prices on the home market and those of exports have started firm up.
Inter-merchant trading showed a significant improvement as the largest direct suppliers and exporters increased prices across the board by around £5 per tonne. This came as a surprise to almost everyone, especially as local mills are almost certainly about to increase prices for November deliveries by around £5 per tonne.
One local mill is now increasing stock and, with steelworks in India also showing renewed interest, a price roll-over would be the worst and least likely outcome to the current round of negotiations. Unfortunately, the good news does not extend to yard intakes, which are not showing any signs of improvement.
Most exporters have put dockside prices up by £2 or £3 per tonne. Shipments of boxes to India are also up by £5 per tonne and, although the increases are small, they are better than anything that have been seen for some time.
There are conflicting rumours about the development of a large new port in Scotland, which may indicate a switch from importing mainly boxes to complete cargoes. Should this be true, the smaller UK firms that have invested in equipment to load and handle export boxes will lose out to large firms with access to dockside facilities.
One trader said: “Any upturn in demand and price is good news but, most of all, we need to get more tonnage through our yards. Until that happens, a solution to this slump is a long way off.”
Stocks at one of Cardiff’s largest steelworks are very low. Whether this is due to the ongoing shortages of all grades or a policy change to spot buying is not clear, but the mill’s current buying pattern is normal.