Ferrous scrap merchants have been left reeling after upward price movements during April and early May have been reversed by a steep fall in recent weeks – and the prospect of more to come.
Merchants across the UK have reported average grade price falls of between £20 and £30 per tonne, with individual categories in some regions dropping £45 or more.
The price reductions came out of the blue for some, who had been hoping that recent weeks of small increases was a sign that the sluggish sector was turning a corner.
Several merchants that MRW spoke to blamed the price falls on the end of a run of big orders and imports from countries such as Turkey, while others were as unable to explain the drops as they had been the earlier price increases.
One merchant in the Midlands said that prices had come down on average £25 to £30 per tonne, with some grades down £40.
“I’m not sure I’d want to take light iron because you don’t know if it’s going to come down again,” he said. “I suppose £35-£40 is the most I’d pay. Heavy would be £60, or £70 at a push, and £80 for cuttings.”
A north-east merchant said he could not understand why prices had risen in the first place: “The sector is all doom and gloom so why did it go up? There was no real reason for it.”
Another in the Midlands, who was paying just over £40 at most for light iron, said that prices were “back to square one” after having come down around £20 per tonne on average.
“They should have left prices where they were – the scrap would have come in anyway,” the merchant said. “We’d just got over people whinging and they were happy, and now they’re going to start whinging again.”
While most traders were unable to predict where prices would go in the short term, some said that they were expecting falls of another £10 to £15.