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Gloomy outlook in ferrous market

Ferrous scrap merchants are expecting a slow start to 2015 following a depressed end to last year.

Several operators have told MRW they did not expect the low prices and slow trade that have been a feature of the ferrous market in recent months to change in the coming weeks.

A typical bump in trade in the run-up to the Christmas period, expected by some, did not happen. This followed a series of price drops in the second half of 2014 which has left a gloomy sentiment in the marketplace.

Many merchants closed for the two-week Christmas and New Year period, typically explaining that there was “no point” in opening for business. Some returned to work on the day after New Year, while many waited until the week after to resume operations.

But most merchants are resigned to a similar pattern in the near future, with low prices, a lack of material and a generally weak export market mostly blamed for the continuing downturn.

One Welsh merchant said: “I would say that trade is awful. It picked up a little before Christmas for non-ferrous, but not ferrous. It is because prices are so low. I hope it will be better next year, but it doesn’t look very promising.”

One Scottish operator was among several who did not expect any improvement for at least a few months, saying: “There’s not much scrap about and prices are low, so I don’t think there wil be any improvement until the spring at the earliest.”

But one Midlands operator was determined to be positive about the forthcoming year despite the current state of the market. “I am reasonably optimistic about 2015, although there isn’t anything on the horizon to make me more optimistic,” he said.

Another commented: “I don’t think trade will be much better in 2015 and certainly not prices.”

One merchant was downsizing his business, reducing trade to a few contract jobs and gate regulars, saying “the good days are gone”.

The merchant said: “I talk to quite a few others and it’s like everyone’s in a depression. We seem to have two good years every five years. If you can ride it out, that’s OK, but some have overstretched themselves with new machinery that is just doing nothing now.”

Another merchant highlighted the cyclical nature of the industry with a slightly more positive perspective: “The end of December has been all right but 2014 overall was one of the worst years that I can remember. It tends to go in cycles and we’ve had a bad year so, hopefully, things will get a bit better in 2015.”

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