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Markets - Ferrous 5 April 2014

The turmoil of recent weeks has given way to a more stable, albeit uninspiring, market for many ferrous scrap operators. However, merchants in some regions are seeing busier gate trade compared to earlier in the year.

February saw a series of price movements downwards with a mixture of low demand and currency fluctuations being blamed. Most merchants that MRW spoke to said that prices have remained relatively static in March, with little significant movement up or down.  A decrease at the beginning of the month, following on from dips in February has seen prices bottom out.

One Midlands merchant reported no significant price movements but said that the market was still difficult to predict.

“Before I would have been able to tell you if there’s a trend of prices creeping up or down, but now they are up a little one minute and back down again the next,” the merchant said.

“The trouble is there’s not much demand. From what I understand the export market isn’t very good. The mills can be as fussy as they like now, the material’s got to be near perfect.”

Another merchant in the south reported similar trading conditions although said that the overall scenario was “gloomy” with not much improvement expected, prompting him to move on stock that had been held in expectation of better prices.

He said: “There’s good days and bad days trade-wise. You open up in the morning and you never know what’s going to come in. I’ve not heard any talk of things getting better, so I’ve started to sell, you’ve got to get rid of it now.”

However, other operators felt that prices were likely to go up. One merchant in the North East concluded that slow trade was a result of operators holding on to scrap because of talk of possible prices increases in April.

Another major operator said that it was expecting price increases of between £5 and £10 for April, as MRW went to press.

Merchants in Scotland reported no movement in prices either, although some experienced better gate trade then others.

“There have been no movements for a while and there are none expected,” said one. “I think it will be flat for quite a while now.”

One operator in Wales said that the persistence of cash transactions, despite new laws introduced towards the end of last year, was causing it to loose trade.

“We’re still being asked to do cash and when we refuse they tell us they can still get cash elsewhere,” said the operator. “The police check on us but don’t seem to be stopping those offering cash.”

Following a sustained period of low prices, many merchants seemed resigned to have to operate at this level, but several sounded as positive as they have done this year.

One North East merchant said that there had been no prices movements this month, but business was improving.

“Trade is good, it’s picked since the beggining of the year. To be honest I don’t know why but I hope it will continue,” he said.

A Southern operator said: “Prices went down the first week of the month but have been stable since then. We’ve been busy, it’s picked up, which is good considering the prices.”

An operator in North West had to cut short his conversation with MRW as “there’s three or four customers here, the strange thing is I’m busy”.

  • The Bureau of International Recycling (BIR) is holding the BIR World Recyling Convention & Exhibition in Miami between 1-4 June with a Ferrous division event, International scrap markets – is there a light at the end of the tunnel?, on 4 June. Among other things, the event will examine the changing world of steelmaking and its impact on scrap. It will also look the effects of the ongoing overcapacity of steel mills and the role China will play in the future.

MRW spoke to 11 merchants across the UK for this report

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