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Gloomier outlook from scrap metal traders

The latest sector survey in Europe suggests deteriorating expectations although scrap metal prices have generally held up.

The mood in the European non-ferrous metal markets remains depressed. The German metal trade association VDM regularly compiles a business climate index for the metal industry and surveys its members in several European countries. The index reflects the mood in the industry and this continues to be burdened by numerous crises.

At the beginning of the new quarter, the business situation in European metal trading deteriorated again compared to the previous quarter. Some 8% of those questioned saw an improvement in the business situation, 29% identified a deterioration iwith 63% viewing the business situation as unchanged compared to the previous quarter.

So it is not surprising that the metal traders’ expectations regarding the next three months are still negative: 34% of the companies surveyed are pessimistic about the course of the new quarter (an increase of 19 percentage points), 11% expect their business situation to improve and more than half of those surveyed (55%) assume that economic development will stagnate.

According to those surveyed, the market supply of scrap has worsened. Currently, 29% of the companies rate the supply as good while 39% rate it worse compared to the previous quarter (an increase of 10 percentage points). Currently, 32% of the market participants perceive a balanced supply situation.

Scrap stocks at companies are growing. Getting on for half (44%) of those surveyed rate their current inventory as high, an increase of 10 percentage points compared to the last quarter. Only 5% of the companies rate their storage volume as low. The remainder (51%) rated it stable.

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