The recent positive trend in price movements continues in the ferrous scrap market, with merchants that MRW spoke to reporting typical increases of between £10 and £20 per tonne on average during the past couple of weeks.
Although most operators welcomed the boost to prices, several said that it had not made much difference to trade as a whole, because a lack of availability of material and low demand kept the market relatively subdued.
Others, however, reported that the rising prices had brought in some more door trade, while currency fluctuations had also helped to boost the export market to some countries, helping the domestic scrap market.
One merchant in the north-east said that prices had gone up £10 per tonne recently, but he was still retaining a cautious outlook.
“We are fairly busy and but I know that some people aren’t,” the merchant said. “Prices have been going up, and there is a bit more demand from other countries. But prices had to go up because of increasing fuel and processing costs.
I’ve heard new steel prices are going up in January, so that should push up scrap prices a bit
“Everyone knows the prices now, there are no secrets. But it’s very uncertain, and who knows what next year will be like.”
Another merchant in the region operating near docks said he was paying £90 per tonne for light iron and £150 for heavy OA.
In the north-west, there were mixed experiences from the merchants that MRW contacted. One with export customers said prices were up and business was buoyant: “I think everyone is quite busy. We’re paying £80 for light iron and £120 for OA. It’s bringing some people out of the woodwork.”
He was cautiously optimistic about the short-term: “There will be some more door trade before Christmas because people don’t want scrap sitting on the shop floor. I’ve heard new steel prices are going up in January, so that should push up scrap prices a bit.”
Another merchant in the region also reported a price increase of £10 per tonne at the end of November, and was paying £50 per tonne for light iron and £100 per tonne for heavy scrap. However the price increases had not had a significant impact on trade.
“It hasn’t brought any more people in, it’s [because the material is] not about,” the merchant said. “Even the non-ferrous is very slow. I don’t think it will pick up before Christmas. I really don’t know what 2017 will be like.”
If you’d asked me six months ago if prices would be where they are now, I’d have bet my house they would not – I was wondering if I’d still have a job
Another merchant near the dockside in the north-west said his firm was paying £100 per tonne for light iron and £140 for heavy OA.
Merchants in the Midlands were reported to be paying up to £20 per tonne more on average across the scrap categories compared with the previous month.
“We’re paying £80 per tonne for 5C and £120 for OA,” said one trader. “Demand is quite high at the moment so commercially we’re busy. My concern is that the prices will go up a little again and then everyone will shut down for Christmas and the prices will collapse.”
He was relatively optimistic but typically cautious about trying to predict the market: “If you’d asked me six months ago if prices would be where they are now, I’d have bet my house they would not – I was wondering if I’d still have a job.”
Merchants in the south also reported price increases of up to £20 per tonne on average, but had mixed experiences regarding the impact of this on business.
“It isn’t really making much difference to the amount of material coming in,” said one operator. “There’s been no Christmas rush and I’m not sure if there will be.”
One southern merchant near docks said he was paying £70 per tonne for 5C and £100 for OA.
In Wales, experiences were also mixed. One trader reported price increases of between £5 and £10 per tonne depending on the category, but this had not necessarily translated into more business. Another reported no price changes but said that trade was similar to the this time last year.
“It usually picks up at the end of November and the first couple of weeks of December and then it goes a bit flat,” the merchant added.
In Scotland, businesses generally reported lacklustre trade. One merchant said that prices had not moved recently and were low, with low demand.
“We are paying £30 per tonne for light iron and £80 for OA,” he said. “It’s the market generally, which is very down, and I wouldn’t bet on seeing any boost in trade before Christmas.”
Another Scottish merchant said that the recently introduced cash ban had affected trade but he was predicting business would perk up: “There was a big rush before the cash ban deadline, but now things have quietened down a bit. I’m expecting that things will pick up before Christmas.”
Merchants had mixed expectations ahead of Christmas, with some predicting a typical boost to trade while others believing that trend was a thing of the past.
One operator in the north-east commented: “In the good old days, people would bring in their material to get money for the festivities, but I don’t know if that will happen this year.”
MRW spoke to 16 merchants of varying sizes for this report