UK steel mills settled in September with an average reduction in their buying prices of around £25 per tonne. Meanwhile, export markets continued to fall sharply during September on an almost daily basis so that, at the time of writing, participants have seen declines of some 25% on average. On the back of reduced arisings at merchants’ processing facilities of some 20-30%, this has made for very tough trading conditions.
With very limited robust sales possible, many exporters are facing the horrors of shipping unsold tonnage as letters of credit fail to come in for material on their books and, in many cases, already on the water. Everyone is waiting to see when the bottom will be reached but, at present, the only outlook is bearish in nature.
The overriding concern is that the market is witnessing the effects of a slowing global economy, with: the USA cutting interest rates in order to redress the slowdown in its own economy; global car manufacturing and construction also slowing down; the trade war between the USA and China; trouble brewing in the Middle East; India looking recessional; domestic new car sales at an 18-year low; and the continued uncertainty and pain that Brexit is inflicting on EU countries. All in all, the global outlook is anything but positive.
UK merchants continue to report slow intakes at their processing facilities, with many finding that the tight margins to which they are working are becoming all but lost in the ensuing weekly drops.
The UK shredding industry in association with the British Metals Recycling Association is undertaking a study into its automotive shredder residues fraction produced when processing scrap vehicles and light fraction materials. It is expected that this will demonstrate that they are of a non-hazardous composition, a question that is being asked of all EU shredder producers.
Mellor Metals Ltd (GBR), Board Member of the BIR Ferrous Division