Quarterly Report – July 2019

Both the domestic and export markets appear to have stagnated in terms of price. Although there is reasonable demand, buying has become more sporadic. This somewhat erratic demand has been buoyed in recent days by attractive exchange rates for UK exporters. Some containerised markets (particularly Indonesia) have been more difficult to sell into price-wise while the main export outlets of Turkey, India and Pakistan continue to be very fickle concerning consumption and prices paid. Turkey is battling to overcome its economic difficulties, adding to the uncertainty when it comes to evaluating mid- to long-term market direction.

Many UK merchants continue to report slow intakes at their processing facilities, exacerbating the demand for inter-merchant material, which in turn is hampering margins, as participants continue to secure all-important tonnage.

The final Brexit outcome and the identity of the UK’s next Prime Minister are the major issues for every business owner, and are the focus of widespread debate and speculation as current government strategies become ever cloudier and the way forward seems ever more indistinct.

When delivering my report to the BIR Convention in Singapore, news was just breaking of the collapse of the British Steel plant in Scunthorpe. Since then, an official receiver has been appointed and, acting on its behalf, Ernst & Young has sought rescue plan bids from interested parties with a cut-off date of midnight on July 15. A frontrunner would appear to be large Turkish steel producer Erdemir. Ernst & Young has intimated that it wishes to reach a conclusion on the plant’s future by the end of August following the facility’s planned summer shutdown, and it is continuing to work on contingency plans for decommissioning should a suitor for the plant not be found.