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

Ferrous scrap merchants remain cautious about the outlook for the market, despite price increases of up to £30 per tonne for some categories since our last sector report.

Operators that MRW spoke to reported average rises of between £10 and £20 per tonne in the past month, although most were reluctant to read much into the surprise increases. While a few said the rises had boosted gate trade, others said it had made no difference and they were still cautious about the market.

Most merchants said they did not know what had driven the change to prices, although some commented that a busier export market, coupled with increasing costs of new steel, had prompted more demand for scrap.

Prices for May were unconfirmed as MRW went to press. While some traders thought there could be more increases on the way, most hoped for stability more than anything else, and there was some concern that prices could fall back again.

One north-east merchant said that prices had gone up around £15 per tonne on average, with light iron at £70 and heavy at £100.

“Nobody expected it and I don’t know how long it is going to last,” he said. “We have a lot of regular customers so that’s good, but the market is very turbulent and I don’t know how long the current situation is going to last. Hopefully, it’s a sign of good things.”

Another merchant reported a similar increase that he was unable to explain, but said that business was not much improved: “Trade is very poor because there’s no material about,” the merchant said. “And where is it going to come from?”

One Midlands operator reported increases of between £20 and £30 during the past month for good-quality material of some categories. But it was expected it to be short-lived: “I like to be optimistic, but I’m expecting prices to drop back down.”

The merchant said the increase was enough to get people bringing in material and there had been a slight increase in gate trade.

“But I’m worried it will just start going down again after an increase, like it did last year,” he said. “I’m not keeping any stock – it’s going straight out. What worries me is there is no specific reason for the increase. I think the worse thing would be if it went up again – we need some stability.” Another merchant said that, despite an increase of up to £30 per tonne for certain grades in the past month, it had not attracted any more material or gate trade: “I think the people who used to bring stuff in have stopped, maybe sold their van and are doing something else now.”

He also predicted that price increases would not last long, especially with the slower holiday season approaching.

Another scrap metal trader that MRW spoke to said his business had reduced its ferrous work and had started recycling plastics.

“There is better money in it,” he said. “There is not much [ferrous] material but prices have gone up, for some reason. I still take it off the regulars but I don’t go out looking for it. Light iron is £40-£50 for decent stuff. For heavy, I try not to pay more than £70-£90.”

In the north-west, one merchant reported receiving more calls from people looking for scrap and offers of higher prices.

“There must be some kind of shortage as new steel prices are going up” the merchant said. “I don’t know if they are chasing material that isn’t there. I wouldn’t trust it but I think it has got legs for another month. Things are definitely busier.”

In Scotland experiences were mixed, with one merchant reporting no real change in prices but a small boost in trade, while another said that prices were up £20 per tonne on average.

Southern merchants that MRW contacted also saw average price increases of between £10 and £20 per tonne. One was unable to say why prices had gone up while another put it down to increasing demand from Turkey.

“The price increases haven’t boosted trade,” one merchant said, “but light iron is the highest it’s been for a while.”

Another southern merchant said his company had seen prices increase by £10 per tonne: “It hasn’t made much of a difference to trade – we were still busy when prices were low.”

In Wales, scrap metal operators reported average price increases of £20 per tonne in recent weeks, with one also citing exports to Turkey and favourable exchange rates as possible drivers of the market.

“No-one really knows for sure why prices are up, but it’s not helping trade. We’ve used our lorries today for the first time in a long time,” he commented.

Another Welsh merchant said that, despite price increases, they were remaining cautious: “It’s no good buying scrap in and then there’s another big drop. If it lasts for another month, that will be good.”

MRW spoke to 13 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.