French and Luxembourg domestic scrap prices are forecast to remain mostly stable in October in a month-on-month comparison but with uncertain sales volumes.
High energy costs and the downturn in finished products are causing steelmakers to plan or foresee continued periods of plant mothballing, to save on energy bills and balance supply with demand. Apart from some steelmakers who have announced fourth-quarter stoppages, mills do not have a clear production plan for October and will decide on output by the day depending on energy price movement, Kallanish notes.
In France and Luxembourg, lower scrap demand is expected to show in October. However, forecasts of scrap price stability are being heard in Germany and Italy, mostly due to the most recent rebound in Turkish scrap.
Negotiation in France, Luxembourg and Germany will start next week. If the price stability becomes a reality, French and Luxembourg domestic shredded E40 grade should remain at €350-365/tonne ($342-357/t) delivered on average. The mixed E8 grade was at €360/t in September. E1C and demolition grade E3 should also remain at around €300/t delivered and between €340-345/t delivered on average respectively this month, sources suggest.
The main concern in the sector is the weak performance of finished long and flat products. Sources who spoke to Kallanish believe European steel prices in October will suffer from a major price fall driven by prolonged market stagnation and overcapacity.
Meanwhile, dock prices in the Benelux were at €300-315/t delivered on Monday last week, up from €275-290/t. They were driven by a Turkish steel demand rebound, which however did not last long after Turkish mills increased their rebar prices sharply the week prior.
In France, ArcelorMittal, Ascometal and Ascoval are announcing production cuts of up to 50% over Q3 (see Kallanish passim).
Natalia Capra France
