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Ferrous metals - UK market overview - 6 July 2012

With the first week of July under the belt, merchants report that trading is still very quiet and is expected to remain so during the summer months. Domestically, the local mills are not taking as much material as many would expect or like them to at this time of year.

When asked about what direction scrap prices were expected to head, most merchants are expecting that, at best, they will stay the same. But there is also the prospect that prices could go down £10 per tonne by the time MRW goes to press.

One merchant from the North stated: “It will be a very quiet month. We’re not expecting anything [in terms of price changes] this week, but we might know more by Thursday.” If the local mills push for anything more than a £10 reduction, the merchant warns that “there will be a lot of people who won’t accept a £20 drop - they’ll just keep hold of material”.

In the Midlands, merchants say that with the export market being flat, not much has changed since last month. While there are reports that a £10 drop in price is “imminent” from the local steel mills, this has merchants pondering to what affect, if any, this fall will have on the markets.

But one merchant stated firmly: “If it goes down any more, there will be a to-do.”

Southern scrap dealers also report that, in general, they have seen no further change in prices since the last big drop in June, and they are not expecting anything for July’s deliveries and tonnages.

For scrap merchants in south Wales, the dockside prices are still slipping - in some cases down by as much as £20 per tonne as exporters struggle to find markets at viable prices.

As expected under the circumstances, local steelworks are seeking price reductions in line with those imposed by exporters. But in this region, negotiations were still ongoing at the time of MRW going to press.

For traders in Scotland, there has been no improvement in either sales or purchases during the past week. With the exception of cargoes that are unsold or awaiting shipment, stocks of finished grades remain low while supplies of raw materials seem to be almost at a standstill.

Several shippers report continuing difficulty in obtaining boxes, but the severe shortage of buyers tends to alleviate this problem. In general, trade now seems to be at an all-time low, and turnover is still falling due to a lack of interest from buyers and limited yard intakes.

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