Ferrous scrap market slumps in the UK

UK scrap dealers are being hit by a significant fall in ferrous prices that is being attributed to lower demand for finished products.

Some traders are reporting a cut of up to 50% in prices for key scrap grades such as light iron (5C) during September. Jason Minns, director at Norfolk-based Glazewing, said there had been a ‘domino effect’ with the larger dealers paying significantly less over the past month and that had been affecting prices throughout the supply chain.

‘We’d normally expect a bounce into September but it didn’t happen. Prices have dropped sometimes two or three times a week,’ he says.

Dealers are unsure as to the reason. Some say Brexit is the cause and it is clear that the devaluation of the Pound has affected export prices. Others say mills are facing less demand for finished products and are buying less stock. The UK is not alone, they add.

Prices do go in cycles so there remains hope that they will pick up in the coming weeks, especially if the lower demand leads to lower supplies. At the same time, yards cannot compensate with better markets for other scrap, with non-ferrous being equally under pressure. One large UK mill is said to have cut the price paid for 18/8 stainless steel solids by 20% in the past fortnight.