At the time of writing, the UK is about to take the next step in easing some of the more major restrictions put in place during its latest COVID lockdown. A seemingly successful national vaccination programme is being rolled out at a very impressive rate.
During this most recent lockdown, the UK scrap industry has continued to trade at near normal levels material-wise, although container availability and higher freight costs have affected flows and final destinations, putting pressure on the domestic transport infrastructure.
The insatiable appetite for raw materials seems to have no price ceiling at present. Since the previous Mirror report in February, daily swings have been seen in the ferrous price - from a low in the Turkish HMS 80:20 ferrous index of around US$ 415 CIF in mid-February to a spectacular resurgence in May to some US$ 502 CIF at present. Coupled with stronger demand from India, Bangladesh, Pakistan, Indonesia and, more lately, China for containerized scrap, this has meant the UK domestic market has yet to confirm its May pricing at the time of writing. Negotiations are continuing with the UK steelworks who are seemingly unable to compete with a fast-moving export market which remains the outlet for two-thirds of UK ferrous scrap.
The outlook for ferrous looks very bullish in the near to medium term. With some favourable spot rates on containers emerging within recent days, pressure for ever-higher price levels will continue. Given the current worldwide economic scenario, a major concern for everyone will be how economies manage long-term inflation.
Mellor Metals Ltd (GBR), Board Member of the BIR Ferrous Division