European scrap prices are forecast to increase significantly in March, possibly in the range €20-30/tonne ($21.3-31.9) compared to February levels against the backdrop of strong post-earthquake Turkish demand, sources in France, Italy, Germany and Eastern Europe believe.
Some scrap exporters from northern European ports are waiting for prices to increase further from the current $430/t cfr Turkey to sell their cargoes, Kallanish understands.
An exporter says that with the current Turkish prices, over €400/t cfr, a lot of material will be shipped to Turkey and European mills will have to pay more for domestic scrap in March. This is also due to short supply and strong demand for grades such as E40 shredded and chiselled E1. Another seller reports an improved intake of E40 but not enough availability to satisfy the high European demand for this grade for which short supply is caused by the lower availability of car bodies.
A large steelmaker in northern Europe is said to be looking for higher scrap volumes in March together with coils producers also looking to procure high volumes thanks to the good sales performance of coils.
In Italy, France, Germany and Eastern European countries such as Poland, February scrap prices are flat on January with some €5-10/t increases. Some mills in northern Europe that negotiated contracts just before the earthquake hit Turkey paid between €20-25/t increases for scrap and they are not seen increasing their prices significantly in March.
Over the past days, mills in these countries have started granting €10/t hikes compared to the beginning of February bringing E40 mixed grade at €380-390/t delivered and E1 at €360/t delivered. In Italy, France and Germany domestic prices are mostly aligned. E40 mixed grade is pegged at €380-390/t delivered on average. Demolition E1 is on average at €340-360/t delivered respectively this month, sources suggest.
Despite strong demand from some flat mills, specialty steel producers and Turkish demand, uncertainty is sustained.
Natalia Capra France