French, Benelux scrap to decline less than expected

French and Benelux scrap prices for some grades may decline by €20-30/tonne ($21-32), although steelmakers need to reduce prices by more due to the very poor performance of finished long products markets, Kallanish notes.

According to sources, suppliers in France, Germany and Belgium are refusing drastic price drops and quoting high figures for shredded E40 and E8 new arisings.

Finished products markets continue to be stagnant, hence the need for producers to contain production costs. This concerns both flats, longs and now also specialty steel. A buyer says that if suppliers refuse to reduce their prices significantly in July, they will simply stop buying and idle production, as current demand can be satisfied by material in stock.

Italian merchant bar producer Beltrame is idling its merchant bar production in Italy, France and Switzerland due to unsustainable costs and the stagnant finished product market (see separate article).

Low collection is being reported for new arisings E8 and shredded E40. While suppliers are citing shortages to mitigate price falls, buyers see a workable price for E40 this month at €300/t delivered or slightly below. This is down from June’s level of €350/t delivered on average. However, achieving the new value may be challenging.

Despite their different scrap needs, producers in Western Europe share the same concern regarding high costs of production, energy and scrap, and the continued downturn of the construction sector. This concerns all Western and northern European markets, from France to Germany, Netherlands, Belgium and Luxembourg, where new construction permits are plummeting. In southern Europe, however, there is a rush to procure scrap amid a tense market and mills paying some increases.

Natalia Capra France