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Ferrous metals - 10 August 2012

With local gate trade described as “variable” at best, as many would expect for the time of the year, an ongoing lack of material available to the yards is not wholly unexpected. While exports have picked up, overall trading remains quiet, with some intermittant bright spots of trading.

£2-10 - predicted price increases for parts of the UK

Local mills have yet to settle for August deliveries and tonnages, and merchants are not expecting local steel mills to be successful in pushing prices further down for August. If anything, many expect prices to follow closely behind the slight increases in export rates or at the very least roll over for the month. Merchants are also reporting that a few yards are holding on to scrap, to sound out the steel mills’ position before agreeing deals.

Some direct suppliers in parts of the UK were still negotiating August prices with the local steelworks and predicting small increases of between £2 and £10 per tonne. They expect to succeed partly because an increase of £10 per tonne would do no more than bring home market prices into line with export prices, which are now around £10 per tonne higher than they were at the end of July.

A serious shortage of all grades is the main factor behind these price movements. Rumours of exporters moving excess dockside stock into local outlets may also be playing a part in helping steelworks keep August demand up and prices down.

In Scotland, dockside prices seem to be edging slightly higher. But with very little interest from buyers in mainland Europe, this is solely due to an ongoing shortage of all grades.

Car breakers are still quiet and many firms report almost nothing coming out of factories and demolition sites. As a result, all sections of the trade report quiet trading conditions and further reductions in yard turnover.

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