EU shredded ferrous scrap prices soften for October contracts

October ferrous scrap prices across Europe fell sharply on month, but recyclers were expected to push for higher prices amid the rising international market, market participants said Oct. 11.

In Northern Europe, the Platts October assessment Oct. 11 for domestic shredded scrap was at Eur380/mt delivered, down from Eur397.50/mt in September.

Some September shredded scrap contracts agreed after the Platts index was published on Sept. 10 were heard to have settled lower than Eur397.50/mt delivered, with sources citing deals and workable levels around Eur380/mt delivered in September. Thus, prices for October were considered to be largely unchanged relative to the later deals heard in September.

In October, the Platts Northern Europe domestic shredded scrap index was at $439.77/mt delivered in US dollar terms, while the Platts shredded scrap bulk export Rotterdam index was at $425/mt FOB Oct. 8, a spread of $14.77/mt.

The spread between the domestic and export prices has steadily narrowed from August, when it was as high as $87.79/mt.

Turkish deepsea import ferrous scrap prices have recently risen sharply from a recent low of $433/mt CFR Sept. 24-28. Platts assessed Turkish imports of premium heavy melting scrap 1/2 (80:20) Oct. 11 at $463/mt CFR, up $5.50/mt on day. Shredded prices have roughly remained around $15-20/mt above HMS 1/2 (80:20) prices.

The sharp hike was fueled by high bulk freight rates and concerns over supply of higher-quality ferrous scrap in the coming months, as scrap collection rates usually slow down into the winter. Rising energy costs have led a number of Turkish mills to buy deepsea cargoes for as far ahead as second half November shipment. Market sources said mills were looking to secure their raw material costs, with energy prices unclear over the winter period.

South EU shredded prices also fall sharply

In Italy, prices remained firmly above the Northern European market, but E40 shredded scrap also fell sharply on month in Italy and Spain.

Platts’ assessment for Southern European shredded scrap was at Eur400/mt delivered for October contracts, down sharply from Eur432.50/mt from September.

“The Turkish import market is better so [domestic scrap] prices are not expected to go down, also taking into account that there is no good quality scrap,” an Italian recycler said. “I know steelmakers want to offset higher energy costs paying by far less for the scrap, but we will not allow this as the international market is recovering.”

In Spain, some sellers were holding shredded scrap offers as high as Eur425/mt delivered.

Some Italian recyclers were heard to sell into the shortsea Turkish import market, finding more attractive prices than in the domestic Italian market for grades such as HMS, for which supply is more ample.

Italian mills were heard to target Eur720/mt EXW for domestic rebar, amid rising energy costs, while Platts assessed TSI Northwest Europe Rebar at Eur772.50/mt ex-works Oct. 6, down Eur17.50/mt on the week.

— Viral Shah, Annalisa Villa