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Markets: Ferrous Report - May 2014

Ferrous merchants across the UK are hoping for the return of stability to the market after an unpredictable year so far.

Following on from a rollercoaster March, which saw prices rise several times in the space of a few weeks, April has been relatively uneventful.

Many merchants reported rises of up to £10 per tonne near the beginning of the month, while others said there had been no change at all. All the operators that MRW spoke to said that there had been no real movement since then.

One north east operator summed up the experience of most merchants across the UK: “There’s been no real increases here at all. It’s been steady all the way through the month. There’s nothing about [material] and it’s very quiet.”

Another north east operator said that despite offering prices better than many of its competitors, things were slow. “We haven’t had a single customer today yet, you get days like that sometimes now,” said the merchant.

A merchant in the north west confirmed that prices had risen between £5 and £10 in the first week of April. “There’s been nothing since then,” said the operator.  “I think that was short lived and just about fulfilling orders. Trade has picked up a little since the beginning of the year though.”

Merchants in Scotland and Wales also reported no significant price movements and said they were experiencing the kind of low demand and supply that was an echo of previous months.

One Scottish operator reported a “little movement in price” a few weeks ago and said that trade was steady but “not breaking any records”.

In the Midlands, however, one merchant did say that trade had been “pretty reasonable”.  

For most, weak demand from China coupled with a strong pound, which was thought by some merchants to be the cause of slow business in March, was continuing to take the blame for slow trading overall in the UK.

However, some operators also blamed other merchants at home who they said were paying over the odds for material, and expressed concern that this was not doing the industry any favours.

“What we need is stability,” said a Midlands merchant. “The price goes up a little and people think, a-ha, it’s moving up now, I’ll hold on to it. Then it drops, so they hold on to it. I think what’s happening now is that people physically can’t hold onto it any longer, so there will start to be some movement.”

“I’d rather the prices stayed where they are for a bit, just to let people get used to it and give a bit of stability.”

Another merchant in the South echoed these sentiments and added, like several, that the Easter period had been particularly slow: “It’s pretty rough, not much coming in. Everyone’s paying far too much.”

“Easter was terrible, I heard some firms shut for the entire week.”

Meanwhile, the British Metals Recycling Association has claimed that councils are putting legitimate scrap metal businesses at risk by failing to issue licences.

As reported by MRW in April, survey of around 600 of the association’s members found that councils had yet to issue 40% of scrap metal dealers’ licences as required by the Scrap Metal Dealers Act, which came into force last October.

However, one merchant that MRW spoke to had little sympathy. “The people that are complaining about not having their licence yet either haven’t applied and are pleading ignorance or they haven’t submitted it correctly.”

Most merchants seemed to find the lack of activity in the market – at least price wise – a relief from the unpredictability of the year so far. Several merchants felt the that market can only go one way after a difficult few months.

One north east merchant said: “If it is going to move again it’s likely to go up, it’s bottomed out now.”

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