The BIR quarterly report has contributions from members in five other countries/regions as well as the UK: Belgium, Germany, Japan, Scandinavia and the US.
From the UK’s perspective, Shane Mellor, managing director of Mellor Metals and board member of the BIR ferrous division, painted a dim picture for the UK sector as the demand falls from Turkey, the largest net importer of secondary raw materials.
He said: “The slow demand for Turkish finished products has been a fundamental factor in the price offers being put forward for furnace-ready material by Turkey’s steel producers. This has had a negative impact on UK bulk deep-sea markets and, at the time of writing, the dockside price for 80/20 material has, apart from a brief upward spurt at the end of May, slipped to a year low that is 22% below the 2023 peak recorded at the end of February.”
He added that this means container destinations have “continued to align their prices to more favourable buying terms”, with prices down 17% compared to the containerised year high reached in February.
Arisings
Along with the difficulties in finding a market for the material, UK ferrous recyclers have been reporting in recent months that arisings in yards have been very low.
Since March, the price being paid for light iron has ben steadily falling, from around £195-220 to £150-£180 last month on the letsrecycle.com price index.
According to Mr Mellor, amid these price drops, “the shortage of material and limited available destinations, trading has been more difficult than in recent months”.
He added that the market outlook “continues to look bearish in the short to medium term”, although did say the shortage of material may induce a correction at some point if demand strengthens.
Economic conditions
As with all business at the moment, the ferrous market in the UK has also been hit with high power prices and rising interest rates, Mr Mellor said.
He concluded: “Although the export market remains the major outlet for recycled raw materials for the UK, which is the largest exporter within the European zone, steel mills in this country are continuing to secure all their needs, albeit at lower levels.
“UK merchants are still enduring a lack of available staff, high energy costs and high inflation; although energy and inflation rates are lower than in previous months, they remain historically higher than they have been for many years. With the addition of a 15-year-high cost of borrowing, business sentiment and confidence are at best pessimistic.”
Three consecutive months of market downside took its toll
- George Adams, SA Recycling
International
This sentiment was echoed by representatives from the continent.
The division’s chair, German Denis Reuter of TSR Recycling, said the market situation has “deteriorated significantly” in recent months, with prices down by almost 20% since mid-March.
He did however say positives could come from effective economic stimulus measures in China, a confident economic policy from the Turkish government and an end to the cycle of interest rate hikes by the largest central banks.
Elsewhere, Mogens Bach Christensen, of Danish company H.J.Hansen Genvindingsindustri, said The Turkish market seems “limited” owing to a lack of finished product sales at price levels that support current recycled steel prices.
He added that Demand in Europe is also limited and many steel mills are expected to be out of the market until late August or early September. As with Turkey, sales of finished product are also difficult for Europe’s steel mills.
George Adams, of the US company SA Recycling, also said that arisings are low in the country, with export demand slow.
He said: “Three consecutive months of market downside took its toll on domestic recycled steel collections. Add into that an abnormally hot summer in the USA and the worst-ever air quality in the Midwest as a result of fires in Canada, and collections have decreased substantially.”
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