Ferrous scrap merchants have been having a more stable time of it during the past few weeks with most reporting unchanged prices. The situation is in stark contrast to the market in recent months, which have seen surprising increases in the price of scrap, only to be wiped out by subsequent large falls.
According to most merchants that MRW spoke to, the underlying trend remained that trade in ferrous scrap was slow, with many operators expecting it to remain so for a while.
While merchants in some regions, particularly Scotland and Wales did report a rise in prices they are paying for scrap most that MRW spoke to reported no movement in the price of ferrous scrap over the last month.
One merchant said: “There’s been no real change in prices. We’d pay £35 for light iron, £60-£65 for heavy. Trade is about the same as this time last year.”
Some merchants were disappointed that the ferrous market was not seeing the boost experienced by the non-ferrous market, a boost they put down to post-Brexit vote currency fluctuations. Others, however, felt that there were no clear reasons why the ferrous sector should be boosted by this in any real or sustained way.
One merchant in the South summed up the sentiment of many operators across different regions: “We’ve got no change in prices where we are,” the merchant said. “Trade is about the same as last year. It’s slow, and some people are saying it’s because of Brexit but it’s just as likely to be because of the holiday slowdown.”
Some merchants lamented what they saw as the increasing downward slide of the ferrous side of the scrap market.
“Trade seems to be getting worse year on year, I’ve no idea why,” said one merchant. Another described business as “worse than usual” and blamed it on the the general lacklustre state of the economy. “Copper and aluminium prices have shot up though, although that hasn’t brought in any more scrap,” the merchant said.
However, a couple of merchants that MRW spoke to in Scotland reported an increase in ferrous scrap prices.
“Ferrous prices have come up £15 to 20 in the last couple of weeks,” said one operator selling it to the export market. “We’re paying £70-80 for light iron, and heavy is £90.”
Another reported a 20% increase in prices on average. “Light iron, we pay £40 and heavy is £50. I’ve got no idea how long it will last. Trade is quiet though.”
A couple of Welsh merchants also reported an increase in prices. One said prices had increased between £5 and £10 per tonne in the last couple of weeks.
“I don’t really know why, I’m hoping it’s a new era,” the merchant said. “Trade isn’t too bad but we are down a bit on the gate trade. The higher prices might bring people coming in. Non-ferrous is good, we can’t complain there, so you’ve got to look on the bright side.”
Another said that prices had risen a little but they were not paying more than £20 for light iron and £30 for heavy scrap.
In the North East, one merchant observed that scrap buyers were expecting better quality and were rejecting the type of material that they had previously accepted.
“I bought some light iron for £40 per tonne the other day but I think I’ll only get my money back on it,” the merchant said. “Trade is quiet, enquiries are quiet, everyone’s fighting for the same jobs, and often quoting more than it’s worth.”
A North West merchant said they were trying to keep their prices stable to establish some interest amid slow trade.
“Light iron is £30, heavy is £45 to £50 and £60 to £65 for good plate and girder,” the merchant reported. “The currency changes have boosted non-ferrous. You’d think it would affect the steel market. Maybe Turkey has enough on hand or they are playing a waiting game at the moment.”
One operator in the South felt prices could increase significantly if demand were to pick up, due to lack of material around.
Another in the Midlands made a similar observation: “There’s been some talk about prices maybe going up, but that’s because there isn’t a great deal out there and the big boys will need to have some at some point.”
However other merchants felt that in the shorter term of the next few weeks, business was unlikely to improve
“It’s the holiday period coming up so it will slow down then,” said one Midlands operator. A Scottish merchant said: “I think trade will be quiet anyway and the holidays won’t make much difference.”
Another scrap trader said he expected no real change in the state of the market for the foreseeable future. “It will stay subdued well into the second half of next year. When people sell at a low price it’s because they think the price will remain low for a while.”
MRW spoke to 16 merchants for this report