The domestic market coupled with steady export demand has led to a fairly long period of price stability within the UK, with the latest domestic prices being rolled over for April. However, confusion remains when it comes to market direction amid daily conflicting reports. At the time of writing, it would appear that, after a short period of bearish sentiment, prices are strengthening slightly on the export front, with increases reported on new cargoes into Turkey and a resurgence of competitiveness on the Asian markets.
Many merchants are reporting a lack of material supply at their processing facilities, citing very quiet weighbridge trade. This in turn has led to an increase in demand for inter-merchant material, sometimes at seemingly unworkable rates as participants look to secure the tonnage needed to meet sales commitments. Other streams of scrap supply, such as factory and demolition material, are also being hampered by the Brexit factor, which is continuing to undermine procurement and investment confidence within the UK. This lack of confidence and the confused government strategy for withdrawal from the EU have led to market distortions and uncertainties, with many manufacturing facilities trying to guess how their products and raw material flows will be affected by the numerous proposed outcomes of the Brexit process. Developers too are displaying a cautious approach when it comes to demolition; although there is a booming new-build housing market, decisions on decommissioning end-of-life industrial sites have been sidelined to a large extent.
Brexit’s effect on confidence in many spheres of the UK economy, and the ripple effects that it is creating across the UK and European business world, is frustrating; many businesses are being hampered and are growing ever more irritable for a Brexit deal conclusion.
As noted in the previous report, some of the UK’s major scrap metal merchants have introduced new acceptance criteria aimed at improving the supply of high-quality melting scrap that satisfies both domestic mills and export destinations alike. This is seen by many to be an imperative to ensure that the UK, as a major producer and exporter of scrap metal, continues to supply quality furnace feed while maintaining a high-end price for its domestically-sourced material.
Mellor Metals Ltd (GBR), Board Member of the BIR Ferrous Division