Three-year low prices have reduced inflows of scrap into yards by at least -20%, which will result in lower scrap availability going forward. However, it is unclear if prices have bottomed. So said International Rebar Exporters and Producers Association (Irepas) raw materials suppliers committee chairman Jens Björkman at Tuesday’s association meeting in Düsseldorf.

The main challenge for scrap suppliers at present is the Turkish economic downturn, which is likely to go on for at least another year, Björkman observed at the meeting attended by Kallanish. Trade barriers are also hampering economic growth and therefore scrap trade. The introduction by Russia of scrap export quotas, a protectionist measure in support of domestic mills, is likely to restrict Russian scrap supply to the export market by 30-50%.

US scrap recyclers do not have currency protection from collection and bear the full brunt of the crash in prices, Björkman said. “It’s for sure affecting recyclers’ ability to get material to their yards and is likely going continue for a while,” he commented.

Suppliers are nevertheless likely to opt for prompt shipment of their material due to financing or storage constraints. “That is weighing on the market at the moment,” Björkman observed.

UK collection is estimated down -50% in some areas, with northern Europe down -20%. “If there is less demand and there is less material coming in you can of course wait a bit longer (to sell),” he continued. However, “… nobody waits for a full cargo and then tries to sell.” Prices have dropped $70/tonne in a short time. “I don’t know where the market drops to but it’s a challenge,” he added.

In Germany, meanwhile, insufficient incineration capacity for waste fractions from shredders is hindering shredded scrap output. The Rhine River is once again experiencing low water levels, which is causing logistical problems as last year. Moreover, new IMO regulations from 2020 require ships to use low-sulphur fuel oil, which has already raised freight rates as many vessels have docked to install scrubbers, thereby reducing fleet availability, Björkman concluded.