Ferrous merchants are experiencing some respite from the falling prices that have characterised the past few months, and some are predicting more stability in the market.
Prices for ferrous scrap were expected to drop by between £15 and £20 in March, but most merchants that MRW spoke to across the UK said that prices had remained static.
Although there was uncertainty about where prices would go in April, it it was generally felt unlikely that there would be further decreases, as MRW went to press. Several operators believe that static prices were a sign of more stability coming to the market.
Nevertheless, most merchants reported that they were not expecting trade to pick up in any significant way in the near future.
One merchant in the north-east said: “Prices have not moved this month [March]. Trade is fairly busy, but I think it will be a long time before prices go back up. In other countries there just isn’t the demand at the moment.”
Another merchant said his experience of slow trade seemed to be replicated at other businesses: “There has been no movement in the past few weeks, and I don’t know what’s going to happen next. There is not much scrap about and trade has been quiet, but we are getting our share.
“All the yards I’ve visited are slow. One had only one customer while I was there and another has hired out all the machines.”
A third merchant in the region said the only silver lining to quieter trade was lower transport costs, although this was small compensation.
“Non-ferrous has picked up a little but not ferrous,” he noted. “We have had the shears out for the first time in a month. The only good thing is that what we used to spend in a week on diesel we spend in a month now.”
In Scotland, the story was similar. One merchant commented that the UK market, especially for exporters, was at the mercy of what was happening on the continent.
“The market is in the doldrums,” he said. “Until the euro picks up and Greece gets its act together, we’re not going to see any change. A lot of people got burned over Christmas when they thought prices would go up in January and they didn’t.”
In the south, merchants also reported no change in prices although some reported better trading than others.
Some merchants felt that March’s static prices were a sign that a more stable market was on the horizon, and that this was a positive thing.
One Midlands trader said: “The domestic market is still very bad but the commercial market is starting to pick up a bit. People are starting to get used to it. Prices were crazy at one point and that was never going to last.
“I think people are realising that these prices are here to stay. It has stabilised – before it was difficult to quote. It’s like the cash ban. People panicked but, once they accepted that they have got to have ID and the money in the bank, they got used to it.”
Although there had been no official word about how steel mills would settle prices for April as MRW went to press, one large merchant said that further decreases did not look possible. A trader in the north-west said he thought business could increase during the next few weeks.
“We think we are seeing the green shoots of recovery,” he commented. “The trades have been a bit busier, construction and so on, so we’re hoping things are going to pick up.”
But another operator in the region had a different view: “I don’t think prices will increase because there is nothing to really drag prices up. It will start to slow down now because of Easter, so we’ll have to see what happens after that.”
One Midlands merchant said that prices had actually dipped and that there was no sign of any recovery.
“Prices have gone down between £5 and £10 this month, depending on the grade,” he said, “£5 at the beginning of the month and another £5 for later. I’ve got no clue what is going to happen next. Long gone are the days when anyone can tell what’s going on.
“Trade is worse than this time last year. I don’t know where people are getting the idea that manufacturing is flying again because it isn’t here.”
One merchant in Wales summed up most operators’ sentiments about looking forward: “In past years, business usually picked up after the end of March, but it’s difficult for anyone to predict what happens any more.”
MRW spoke to 14 merchants for this report