The inter-merchant spot market for UK scrap was up over the week to Friday August 14 due to firmer demand from major shredders that supply consumers in the steel sector combined with persistently tight availability, sources told Fastmarkets.
Fastmarkets’ weekly price assessment for steel scrap 5C, loose old light, domestic, delivered inter-merchant, UK was assessed at £۹۰-۱۰۰ ($۱۱۸-۱۳۱) per tonne on Friday, up from £۸۵-۹۵ per tonne on August 7. Some sources said offer prices were as much as £۱۱۰ per tonne in dockside areas where domestic trade competes with export business.
*** The light iron market
“The light iron market is even as high as £۱۰۰-۱۱۰ per tonne in parts of the country,” one trader said.
“Shredded scrap supplies are very tight due to the UK economy operating at about 40-45% of its usual level, so a lot less scrap is being generated from supply areas such as car scrappage and as a result of demolition projects in the construction sector,” one UK scrap trader said.
The move higher in the light iron market follows a corresponding increase in monthly delivery settlements to consumers for August business, with contract prices for the month assessed up £۱۵ per tonne on most grades bar borings, which increased by £۱۰ per tonne.
***heavy melting scrap
“UK exporters have good orders for heavy melting scrap 1&2 steel scrap from buyers in Turkey and elsewhere… up by £۱۵ per tonne from last month,” another UK steel scrap source said. “UK steelworks will have to pay very close to that in order to secure sufficient tonnages.”
“You have to fight hard for steel scrap supplies, even for small parcels; there is tighter scrap generation,” another scrap trader said. “Against that there is fairly firm demand now for domestic supplies, and the British export market into Turkey and India is steady.”
***Index for steel scrap
Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was calculated at $276.12 per tonne on August 14, down slightly from $277.73 per tonne a week earlier but up from $۲۵۱٫۵۱ per tonne a month earlier on July 14.
The corresponding weekly calculation of the steel scrap, shredded, index, import, cfr Nhava Sheva, India was $309.64 per tonne on Friday, up from $304.18 per tonne a week before.
***exchange rate
With international scrap markets trading in dollars, the exchange rate for the UK’s pound sterling versus the US dollar can influence steel export business from the UK. A stronger pound sterling value makes UK exports more expensive to buy, while a weaker dollar makes exports more expensive for traditional buyers of scrap from the UK, who work in a market where trade is denominated in dollars.
The UK currency was trading at £۱ per $1.31 on August 14, up from around £۱ per $۱٫۲۶ on July 14 and well up from a year-to-date low of £۱ per $۱٫۱۹ on March 19, according to exchange rate website Oanda.com.
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