Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of MRW, please enable cookies in your browser

We'll assume we have your consent to use cookies, so you won't need to log in each time you visit our site.
Learn more

Market Focus: Ferrous metals

Ferrous metals

Merchants are hoping that trade in the scrap ferrous market could pick up a little after prices rose slightly in a few regions.

Some merchants contacted by MRW said that prices had remained flat while others mentioned rises of between £5 and £10 per tonne – and a few others were expecting the same in the coming days.

Trade across the country was still generally very slow for most ferrous businesses, however, with price increases either too small or too recent to encourage those with scrap to bring it into yards. A simple lack of material is keeping local markets subdued, regardless of price.

One trader in the north-east said: “It seems to have picked up a bit. Light iron has picked up and we’re paying £30 per tonne. We’ve got two to three months’ worth of demolition work, so we are busy for a while. But I’ve also talked to a few people who said they had put up their prices but it hadn’t made a difference to what is coming through the door because there’s nothing about.”

Another merchant reported that nothing much had changed in recent weeks, and that a difficult economic outlook in some sectors was likely to have a knock-on effect: “There wasn’t really any movement in February, and trade is very, very quiet. The oil and gas industry is slow and a lot of firms in that sector are not producing.”

In the north-east, one trader welcomed the small bump in prices but said that stability was more valuable at this point. Many were also concerned with what they perceived as the Government’s lack of action to help an ailing steel industry.

“Prices went up about £5 a tonne, but it’s a slight move and has not really had much effect on trade,” the operator said. “Light iron is £5, heavy is £30-£40. I’m hoping that current prices will roll over and things will stay stable for a while.

“The tariffs against Chinese steel imports aren’t high enough, and I can’t understand why the Government is not doing anything about the steel works closing.”

Merchants in the south that MRW spoke to had not seen an increase in prices in recent weeks and had mixed fortunes with trade.

“Prices haven’t really moved,” said one. “Trade is very bad. January and February are usually quite quiet but this is extremely quiet – it hasn’t picked up since December, to be honest.” Another southern merchant said that prices had also remained the same in recent weeks but he was more positive about trade, stating that his yard was “very busy”.

In Scotland the picture was similar. A couple of merchants told MRW that prices had not changed and trade was quiet, with uncertainty about the future. But one commented that he had seen a drop of about £10 a tonne across prices in recent weeks and that uncertainty in European markets was affecting trade.

“A lot of engineering companies are having problems because of North Sea oil operations downsizing, and that is having a knock-on effect on the service industry,” the merchant said.

Nevertheless some merchants hoped that the small price increases could be a sign of the market brightening a little after a long period of low prices, low availability and uncertainty.

A Welsh operator said: “It has gone up around £5 on light iron, which is a bit encouraging. It hasn’t made much difference to trade yet but it has only been a while. Business is still very slow but, hopefully, this is a sign that it’s picking up a bit. At least it’s moving in the right direction.”

Another Welsh merchant reported price increases but said the market was still too uncertain for him to feel optimistic for his business.

“Prices have gone up £5,” he said. “The problem is we’re not getting enough stuff – I don’t think £5 more will make much difference. Anyway, we could hear tomorrow that they’ve gone down again. At the moment light iron is £30 for larger amounts, heavy is £40- £50 collected and £60 delivered if we don’t have to cut it.”

However, he was slightly buoyed by reports that Liberty Steel could start smelting scrap in Newport if it could get good enough energy security.

Prices had also risen for merchants contacted by MRW in the Midlands. One said his yard was busy but “there are no margins” and uncertainty still ruled. Another operator put the price increases down to a lack of material. He was concerned that upwards movements in prices could spark yo-yoing that would be detrimental to the market.

“I was anticipating a drop but it didn’t happen,” the trader said. “I think prices might come up quite quickly now, but what I’m worried about is that, once all the material comes in and there is too much, prices will drop down again like last year. I would have been happy if they had stayed where they were – it’s good to have some stability.”

Door trade was even slower, he reported: “People are aware that scrap isn’t worth much. Before, they were ignorant and would come in. You’d only be able to give them a few pounds but at least you were getting something. Now they know it’s not worth much so they don’t bother.

“But, thinking positively, if prices are going up it must be because there is a market for metal.”

MRW spoke to 15 merchants for this report

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.