Most secondary metals merchants were anticipating a £5 fall in ferrous prices this month as MRW went to press, the first notable movement in many regions for several weeks.
Most said that prices had not moved significantly in January and that trade had continued to be extremely slow, with low levels of activity and material continuing to create a subdued marketplace.
A few merchants expressed surprise that business was not so bad. But they were cautious about interpreting it as a sign that the market could be taking an upturn, with most still believing that there was unlikely to be any real improvement in the industry in the near future.
One merchant in the north-east said that trade in the sector since the beginning of the year had been “practically non-existent” and, although prices had not moved, they were expecting a drop in February.
“Not that it will make much difference – there isn’t anything about anyway,” he added. “I can count on one hand the number of people who have come in during the last week. I tried to sell light iron the other day but nobody wanted it.
“I think there will be a few yards calling it day if this carries on much longer.”
One ferrous merchant said they anticipated that prices would move down between £5 and £10 per tonne on average in February, but acknowledged that trade was moderately busy.
“Some of our clients are busier than others. It’s mainly factory customers for us, there are very few members of the public now,” said the operator. “The only industry that is busy at the moment is the car industry.”
In the Midlands, the story was similar. One trader said he was busy with local work but was expecting a price fall, and had given up trying to anticipate the market.
“If you’d asked me 10 years ago I could have told you what was going to happen, but now it’s very difficult to do that,” he said. “It is hard for me to promise any material if I can’t be sure if I can get it.
“And if there is no material, then the price doesn’t matter. At least if you’ve got something you can try and do something with it. This week has been a bit better and stuff has been coming in, but I don’t know if that will last.”
Merchants in Scotland also reported no movement in prices in January and weak trade due to low prices.
“I think prices will go down £5 this month,” one operator said. “Trade is very quiet at the moment. The prices are so low no one is picking metal up – it’s not worth their time or the petrol.”
In the north-west one trader felt there had been some glimmer of positivity in the market, including the EU’s decision to put duties on imports of Chinese rebar of between 9% and 13%, and indications of increasing activity in the construction sector as spring approached.
But he cautioned: “These are quite good signs but the overall picture is still gloomy.”
Another ferrous merchant in the region reported an upward bump in prices, but clarified that this was likely to be a local one off. Otherwise he reported “unbelievably quiet” trade, concluding that “it’s just the state of the world at the moment”.
Merchants in the south reported no movement in prices and flat trade, and were generally gloomy about the outlook.
In Wales, one operator said the prices they could get for light iron and shearings had risen by around £5 per tonne but it was of little consequence due to the scarcity of material.
“Prices have gone up a bit but it doesn’t really make much difference as there doesn’t seem to be much material around,” the merchant said. “Not many people are coming in so we haven’t bought or sold much.
“It is usually quiet in January, but it has never been as quiet as this,” the continued. “I’m doing my VAT return and it is down again. The Government doesn’t seem interested in doing anything to help the industry.”
Another ferrous operator said he was anticipating that prices would decrease £5 per tonne on average across the categories, but the business was still willing to pay for good material in adequate quantities.
“We might pay £30 per tonne for light iron if it’s good and there are three or four tonnes,” he said. “It all depends how much there is. Before, you didn’t used to care about the cost of the lorry and the oxy, that would all come out in the wash, but now you have to factor it in.”
Trade in the area in general was suffering, the merchant reported: “I can’t see things getting any better.”
MRW spoke to 15 merchants for this report