German scrap market expects price decrease in May

German scrap prices increased in April due to the Russian invasion of Ukraine and short supply, according to German scrap market participants. However, most sources expect prices to fall in May despite uncertainty continuing to impact the market.

Prices in southern Germany and in most other parts of the country increased this month by €20-30/tonne ($21-31/t), a Bavarian buyer tells Kallanish.

Nationwide average prices for old thick scrap sort 3 are up from €560/t to €590/t. The price for new scrap sort 2/8, meanwhile, has reached €620/t.

The price for E40 shredded scrap has reached €600/t.

However, in Austria, scrap prices increased significantly in April, by €50-70/t. Old thick scrap sort 3 has thus reached €585/t and new scrap sort 2/8 is at €595/t.

“We expect that prices in May will probably fall by €30-50/t, to the levels of March,” another German market participants notes. “Turkish and Italian scrap prices have already started to decrease.” 

Supply continues to be pressured further by persistent semiconductor shortages, which have led to production halts in the automotive industry, sources say.

Market participants continue to describe the situation as very turbulent, because everything depends on the Russia-Ukraine war, new sanctions against Moscow and high energy costs. “Another factor will be if Russia continues to stop natural gas deliveries, like it already did with Bulgaria and Poland. This will also impact the market,” a merchant observes.

German steelmaker Salzgitter already announced plans in April to increase its scrap consumption in the coming years (see Kallanish passim). The plant will expand its scrap activities by 50% from the current 2 million tonnes/year by 2030 and the intermediate target is 2.5mt by 2025. Salzgitter will buy more high grades, such as new scrap E8.

Svetoslav Abrossimov Bulgaria