Current Scrap Metal Prices

There has been very little movement in strip mill product prices since July. However, demand over the holiday period has been slower than normal for the time of year because of the current poor economic climate. This has caused growing concern over the trend for the final quarter. Most companies have sufficient inventories for the near-term and are in no rush to conclude new business. The mills are likely to reduce capacity rather than chase orders by lowering prices, particularly before the annual auto contracts are settled. So far, there is no evidence of severe downward pressure from third country imports. Despite price reductions by Chinese exporters, many European buyers have not been tempted to place business because they suspect further discounts will be offered.

In Germany, the higher values that producers tried to enforce for September deliveries of some stripmill products were only accepted by a limited number of customers. Service centres have enough steel to cover current demand, which has weakened in several market sectors. There is now more ex-stock material available from the EU mills. Some quantities of Indian and Chinese imports have been ordered and should arrive in time for the final trimester. Negotiations with local suppliers for period four shipments are due to start later this month. We do not believe that any increases will be possible, despite such proposals by the steelmakers.

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